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Foreclosures 2008 Enacted Legislation

2008 Enacted Foreclosure Legislation

(Excludes foreclosures due to tax delinquencies and homeowner associations)


Last Updated: January 21, 2009

NCSL Contact:  Heather Morton, Denver, (303) 364-7700

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 Alaska

S.B. 231
Signed by governor 6/6/08, Chapter 60
Allows the Alaska Housing Finance Corporation to provide financial assistance to prevent homelessness, including prevention of foreclosures and evictions.

Arizona
Signed by governor 4/28/08, Chapter 94
Conforms Arizona tax statutes to the 2008 Internal Revenue Code (IRC). Modifies the definition of the IRC for tax year 2008 to the federal IRC in effect on January 1, 2008. This includes changes adopted by Congress, specifically the 2007 Small Business and Work Opportunity Tax Act, Energy Independence and Security Act, Mortgage Forgiveness Debt Relief Act and Technical Corrections Act.
California
Signed by governor 9/25/08, Chapter 278
Existing law prohibits a foreclosure consultant from entering into an agreement to assist the owner in arranging, or arrange for the owner, the release of surplus funds prior to 65 days after the trustee's sale is conducted. This bill, instead, prohibits a foreclosure consultant from entering into an agreement described at any time. Allows a homeowner to cancel a contract with a foreclosure consultant within five days after signing the contract, and to do so by mail, e-mail, or facsimile. Requires that a contract with a foreclosure consultant be written in the language principally used by the foreclosure consultant to describe his or her services or to negotiate the contract, and requires the foreclosure consultant, in specified circumstances, to provide the owner, before the owner signs the contract, with one or more copies of a completed contract written in specified other languages, and makes a conforming change in this regard. The bill prohibits a foreclosure consultant from taking any power of attorney from an owner for any purpose. The bill requires a foreclosure consultant to register with the Department of Justice in accordance with certain requirements, and to obtain and maintain a surety bond of $100,000. A violation of these provisions would be a crime. The bill would permit the Department of Justice to refuse to issue, or to revoke, a foreclosure consultant's registration for any violation of the law regulating foreclosure consultants. The bill creates the Foreclosure Consultant Regulation Fund in the State Treasury for the deposit of fees submitted to the Department of Justice for registration as a foreclosure consultant, and available to the department upon appropriation by the Legislature for the costs of administering the registration program.
 
Signed by governor 9/25/08, Chapter 282
Provides further conformity to federal income tax laws by conforming to specified provisions of the federal Mortgage Forgiveness Debt Relief Act of 2007, relating to the exclusion of the discharge of qualified principal residence indebtedness, as defined, from a taxpayer's income if that debt is discharged after January 1, 2007, and before January 1, 2009, as provided.
 
Signed by governor 7/8/08, Chapter 69
Until January 1, 2013, and as applied to residential mortgage loans made from January 1, 2003, to December 31, 2007, inclusive, that are for owner-occupied residences, this bill, among other things, requires a mortgagee, trustee, beneficiary, or authorized agent to wait 30 days after contact is made with the borrower, or 30 days after satisfying due diligence requirements to contact the borrower, as specified, before filing a notice of default. The bill requires contact with the borrower, as defined, in order to assess the borrower's financial situation and explore options for the borrower to avoid foreclosure. The bill requires the mortgagee, beneficiary, or authorized agent to advise the borrower that he or she has the right to request a subsequent meeting within 14 days, and to provide the borrower the toll-free telephone number made available by the United States Department of Housing and Urban Development (HUD) to find a HUD-certified housing counseling agency. The bill requires the notice of default to include a specified declaration from the mortgagee, beneficiary, or authorized agent regarding its contact with the borrower or that the borrower has surrendered the property. If a notice of default had already been filed prior to the enactment of this act, the bill instead requires the mortgagee, trustee, beneficiary, or authorized agent, as part of the notice of sale, to include a specified declaration regarding contact with the borrower. The bill authorizes a borrower to designate a HUD-certified housing counseling agency, attorney, or other advisor to discuss with the mortgagee, beneficiary, or authorized agent, on the borrower's behalf, options for the borrower to avoid foreclosure. The contact and meeting requirements of these provisions would not apply if a borrower has surrendered the property or the borrower has contracted with an organization, as specified. The bill also requires specified mailings to the resident of a property that is the subject of a notice of sale, as specified. In addition, the bill makes it a crime to tear down the notice of sale posted on a property within 72 hours of posting. Until January 1, 2013, this bill requires a legal owner to maintain vacant residential property purchased at a foreclosure sale, or acquired by that owner through foreclosure under a mortgage or deed of trust. The bill authorizes a governmental entity to impose civil fines and penalties for failure to maintain that property of up to $1,000 per day for a violation. The bill requires a governmental entity that seeks to impose those fines and penalties to give notice of the claimed violation and an opportunity to correct the violation at least 14 days prior to imposing the fines and penalties, and to allow a hearing for contesting those fines and penalties. Until January 1, 2013, this bill gives a tenant or subtenant in possession of a rental housing unit at the time the property is sold in foreclosure, 60 days to remove himself or herself from the property, as specified.
Colorado
Signed by governor 6/5/08, Chapter 440
In residential foreclosures filed on or after August 1, 2008, requires a commercial lender to give the borrower a written notice, at least 30 days after the borrower's default and at least 30 days before filing its notice of election and demand, containing contact information for the Colorado foreclosure hotline and the lender's loss mitigation representative. Creates the Foreclosure Prevention Grant Fund, to be administered by the Division of Housing in the Department of Local Affairs (division), for the purpose of providing outreach and notice of foreclosure prevention assistance to persons in danger of foreclosure and communities with high foreclosure rates. Directs the division to solicit gifts, grants, and donations to the fund and to develop criteria for the award of grants to qualified local organizations to carry out these outreach efforts. Gives supervisory responsibility over the grant program to the state housing board. Requires the division to report annually to the General Assembly on its activities and the receipts and expenditures from the fund. Appropriates $100,000 from the general fund to the foreclosure prevention grant fund, and from the foreclosure prevention grant fund to the department of local affairs for allocation to the division, for purposes of the act.
 

H.R. 1009
Adopted 4/16/08
Concerns the promotion of foreclosure counseling for homeowners in Colorado.

Connecticut
Signed by governor 6/12/08, Public Act 176
Creates three mortgage assistance programs and establishes a 10-member mortgage assistance program committee to develop standards for and procedures to implement them within the Department of Economic and Community Development (DECD). The programs must be funded by state bonding and loan repayments under the programs. The governor, House speaker, Senate president pro tempore, House and Senate majority and minority leaders, the banking commissioner and the Banks Committee chairpersons must each appoint one member to the mortgage assistance program committee. The committee must elect a chair from among its members. The committee must develop written standards that, at a minimum, establish (1) the standards for qualifying mortgages and mortgagors for the emergency mortgage assistance programs; (2) the scope and nature of the emergency assistance available; and (3) the terms and conditions under which DECD will provide, and be repaid for the assistance provided under the programs. The committee must also develop an application for relief and procedures for the committee's determination of eligibility. The standards and procedures the committee will develop must be adopted in regulations by DECD by October 1, 2008. For all loans, the bill establishes a fiduciary duty from all lenders and mortgage brokers to borrowers. The bill prohibits the financing of insurance and refinancing that do not benefit the borrower. It requires mortgage professionals to use reasonable care, requires disclosures with regard to yield spread premiums, and prohibits the influencing of real estate appraisals. It also prescribes on-line continuing education for mortgage lending professionals and increases mortgage broker surety bonds. The bill also allows the banking commissioner to impose a case-by-case foreclosure moratorium of up to six months. The bill defines "nonprime loans." For nonprime loans, it establishes a specific fiduciary duty. It prohibits certain provisions in a nonprime loan, such as prepayment penalties and interest rate increases after default. It also prohibits the making of these loans unless the borrower is properly qualified and takes a course, funds are escrowed, and a specific notice is provided. For all of these lending provisions, the bill defines a "mortgage broker" as a Department of Banking (DOB)-licensed person who, for a fee, commission, or other valuable consideration, negotiates, solicits, arranges, places, or finds a mortgage, or his successors or assigns. It defines a "lender" as any DOB-licensed person or entity originating a mortgage, or its successors or assigns.
 
Signed by governor 5/12/08, Public Act 58
Extends the law on mortgage payoff statements to reinstatement payment statements. It defines a "reinstatement payment statement" as one that provides the total amount owed that a borrower can pay to cause the loan to be reinstated, provided any other contractual conditions for reinstatement are satisfied. Specifically, the bill requires a lender to, upon written request, provide a reinstatement payment statement in writing to the borrower or borrower's authorized agent by the date noted in the request as long as that date is at least seven business days after the request is received. The bill also shortens the deadline for payoff statements from 10 business days to seven. The borrower's attorney can make the request to the lender if it relates to a default, as long as the request represents that the person is an attorney authorized to do so by the lender.
 
Signed by governor 4/29/08, Public Act 22
Allows recipients of Temporary Family Assistance (TFA) or State Supplemental benefits who are foreclosure defendants to be eligible for Department of Social Service (DSS) emergency housing benefits when a foreclosure judgment is entered, rather than when the property owner's right to redeem has expired.
 
Signed by governor 11/25/08, Public Act 08-2
Establishes protections for tenants residing in foreclosed properties and expands the maximum allowable length of the foreclosure mediation program and delays the start of the first mediation session.
Delaware
Signed by governor 8/21/08, Chapter 419
Regulates foreclosure consultants and foreclosure reconveyances in order to protect homeowners from foreclosure rescue schemes that deplete the homeowner’s equity.
 

S.R. 17
Adopted 6/10/08
Creates a Delaware Mortgage Foreclosure Task Force, which is charged with studying and making recommendations to address the escalating problems associated with mortgage foreclosures in Delaware.

District of Columbia
Approved 4/4/08, Law 17-0087
Prohibits equity stripping through unscrupulous real property transactions and protects financially distressed homeowners.
Florida
Signed by governor 5/28/08, Chapter 79
Laid on table 4/30/08
Provides legislative findings and intent relating to need to protect homeowners who enter into agreements designed to save homes from foreclosure; prohibits foreclosure consultants from engaging in specified acts or failing to perform contracted services; requires all agreements for foreclosure-related services and foreclosure-rescue services to be in writing; specifies required information in written agreements.
Georgia

S.B. 531
Signed by governor 5/13/08, Act 576
Relates to foreclosure on mortgages, conveyances to secure debt, and liens, so as to require a foreclosure to be conducted by the current owner or holder of the mortgage, as reflected by public records; provides for the identity of the secured creditor to be included in the advertisement and in court records; changes the requirement for mailing or delivery of notice to debtor for sales made under the power of sale in a mortgage, security deed, or other lien contract; provides for the content of such notice.

Hawaii
Signed by governor 6/3/08, Act 137
Requires mortgage foreclosure rescuers to provide specific information and disclosures to distressed property owners and imposes specific prohibitions on mortgage foreclosure rescuers.
 
Signed by governor 6/3/08, Act 138
Amends the mortgage foreclosures law to ensure that consumers and others receive important informationregarding a foreclosure in a timely manner.
Idaho

S.B. 1431
Signed by governor 3/18/08, Chapter 192
Provides that all contracts entered into while a residential home is in the foreclosure process must be in writing and that consumers have a five day right of rescission. In addition, a warning for consumers about foreclosure rescue scams is included in foreclosure notification papers and in any written contract.

Illinois
Signed by governor 8/14/08, Public Act95-0826
Provides that a specified notice shall be sent by mail to a mortgagor prior to a judicial sale, even if the mortgagor was previously defaulted, that will notify the homeowner of the right to remain in possession for 30 days after the entry of the order of possession, unless that right was previously terminated by the court.
 
Signed by governor 8/15/08, Public Act 95-0834
Amends the Deposit of State Moneys Act. Authorizes certain linked deposits for loans to persons refinancing a home as well as for purchasing a home. Provides that for a "home loan", the principal amount of the loan may not exceed the conforming loan size limit (instead of 50 percent of that limit for a single-family dwelling) established by the Federal National Mortgage Association.
 
Adopted 11/20/08
Urges Congress to enact a two-year moratorium on interest rate reset increases under sub-prime adjustable rate mortgage home loans.
 
Governor's amendatory veto overridden 9/25/08, Public Act 95-0961
Provides that for all residential foreclosure actions filed, the plaintiff must attach a Homeowner Notice to the summons that contains specified information. Contains provisions concerning the preparation and delivery of payoff demand statements. Contains provisions concerning attorney's fees and costs associated with foreclosure actions.
 
Signed by governor 8/26/08, Public Act 95-0933
Amends the Code of Civil Procedure. Provides that in a mortgage foreclosure proceeding, where a timely written notice concerning rent payment was not given to the tenant, or where the tenant makes a good-faith effort to keep current in the rent, an order of possession must allow the tenant to retain possession under the lease. Provides that no mortgagee-in-possession, receiver or holder of a deed or certificate of sale, or purchaser shall file a forcible entry and detainer action against a tenant of mortgaged real estate until 90 days after a notice of the intent to file that action is served on the tenant. Provides that the court records relating to a supplemental petition for possession against a tenant who is current on rent or who made good faith efforts to pay the rent shall be ordered sealed, except as to a law enforcement officer or a government entity.
Indiana
Signed by governor 3/21/08, Public Law 100
Eliminates the requirement that a sheriff post notice of a foreclosure sale in at least three public places in each township where the real estate is located.
Iowa
Signed by governor 4/25/08, Chapter 1125
Became H.F. 2653 3/13/08
Provides for the regulation of mortgage foreclosure consultant contracts and mortgage foreclosure reconveyance transactions.
Kentucky
Signed by governor 4/24/08, Chapter 175
Creates a new section of KRS Chapter 198A to permit the Kentucky Homeownership Protection Center to be established by or through the Kentucky Housing Corporation; declares the purpose of the center to be providing a centralized location for information on public services to assist a homeowner who is in default or in danger of default on a home loan; creates a new section of Subtitle 2 of KRS Chapter 286 to require the mortgagee to provide to the homeowner at the time of closing any brochure, pamphlet, or brief document prepared or approved by the Kentucky Housing Corporation that describes services provided by the center; creates a new section of Subtitle 2 of KRS Chapter 286 to declare it is unlawful for a person in the course of a mortgage transaction to improperly influence the development, report, result, or review of a real estate appraisal in connection with a mortgage loan; amends KRS 286.8-010 to define terms; amends KRS 286.8-020 to clarify who is subject to the subtitle; establishes procedure for any mortgage loan company, loan broker, or branch to apply for an exemption; amends KRS 286.8-030 to specify when it is unlawful to make a mortgage loan; amends KRS 286.8-032 to permit the executive director to require electronic filing of applications and fees; exempts a broker from the educational training course required of applicants if the broker has held a license for at least one year and has held a license within a five year period prior to filing the application; requires a broker-applicant to establish that the district, state, or territory from which the applicant applies, resides, or performs the primary portion of his business has rules, regulations, or other provisions which by reciprocity or comity are at least equal to the ones in this section; requires a mortgage loan company or broker to give at least 10 days' notice to the executive director of a change in location or business name or addition of a branch; require every mortgage loan company to maintain an agent for service of process in Kentucky; amends KRS 286.8-034 to increase license fees for each principal office and branch office; amends KRS 286.8-090 to create new actions for which the executive director may suspend or revoke a license or take other action against an applicant, licensee, person, or registrant; declares that surrender or expiration of a license, registration, or exemption shall not affect the licensee's civil or criminal liability for acts committed prior to the surrender or expiration; amends KRS 286.8-100 to allow the executive director to deem an application abandoned when it is received incomplete and the applicant fails to provide required information and fees or fails to respond to a request for information; amends KRS 286.8-110 to prohibit prepayment penalties after the third anniversary of the mortgage or after 60 days prior to the date of the first interest rate reset, whichever is less; restricts prepayment penalties to not more than three percent of the outstanding balance the first year, two percent the second year, and one percent the third year; amends KRS 286.8-140 to permit the executive director to require electronic filing of certain filings and fees; amends KRS 286.8-160 to require mortgage loan companies and brokers to keep records for a period determined by regulation by the executive director but no more than five years after a mortgage loan application is completed; permits preservation of records in an electronic retrievable format; requires a mortgage loan company or broker that will cease operations to notify the executive director prior to discontinuance of the mortgage lending business as to the physical location where records are preserved and requires the designation of a custodian of records; amends KRS 286.8-190 to make technical changes; amends KRS 286.8-220 to prohibit the use of prescreened trigger lead information derived from a consumer report to solicit a consumer who has applied for a mortgage loan with another mortgage loan company or broker under certain conditions; amends KRS 286.8-250 delete the definition of "physical location"; amends KRS 286.8-255 to require registration of mortgage loan originators and mortgage loan processors; permits the executive director to require submission of federal and state criminal background records as part of an application; designates when a certificate of registration expires; requires mortgage loan originators and mortgage loan processors to notify the executive director in writing of a change of employment within 30 days of the change; amends KRS 286.8-260 to require the executive director to approve professional education courses and education providers to meet the continuing professional education requirements; amends KRS 286.8-270 to require the mortgage loan broker to act in good faith towards the borrower and comply with certain duties; amends KRS 286.8-990 to create the Kentucky Residential Mortgage Fraud Act; increase fines that may be imposed by courts for violations of this subtitle; amends KRS 286.8-060 to require surety bonds to be payable to the executive director and provide that bonds shall be available for recovery of expenses, fines, and fees levied by the executive director and for losses and damages; creates new sections of Subtitle 8 of KRS Chapter 286 to create the mortgage lending fraud prosecution account; allows expenditures from the fund for criminal prosecution of fraudulent activities within the residential mortgage lending process; authorizes the executive director to file administrative complaints for potential or actual violations of this subtitle; permits the executive director to levy a civil penalty of $1,000 to $25,000 for violation of any provision of this subtitle or any administrative regulation promulgated thereunder; declares it unlawful for a licensee or entity holding a claim of exemption to broker or fund a mortgage loan if the total net income generated on the loan exceeds $2,000 or four percent of the total loan amount, whichever is greater; authorizes the executive director to establish standards and requirements by administrative regulation for license testing, prelicensure education and continuing education requirements for mortgage professionals subject to testing and education requirements under this subtitle; requires any person applying for a license, registration, or claim of exemption to pass a written examination prior to issuance of a license, registration, or claim of exemption; requires an examination to be held at least weekly in Frankfort and permit an examination to be held on a monthly basis at a location in Kentucky designated by the executive director which is reasonably accessible to all applicants; requires the executive director to bar an applicant for two years from taking the examination if the applicant fails to pass three consecutive times; authorizes the executive director to enter an emergency order suspending, limiting, or restricting the license, claim of exemption, or registration of a mortgage loan company, broker, originator, or processor; amends KRS 360.100 to delete the minimum principal amount of a high-cost home loan; establishes an additional threshold of total points and fees that exceed the greater of $2,000 or four percent of the total loan amount; defines terms; prohibits a high-cost home loan lender from imposing prepayment penalties unless the lender offers the borrower a loan without prepayment penalties and the borrower initials the offer to indicate that the borrower rejected the offer; prohibits prepayment penalties of more than three percent the first 12 months, two percent the second 12 months, and one percent the third 12 months; establishes criteria which means a borrower is presumed to be able to make scheduled payments to repay the loan; requires loan documents to specifically authorize late payment fees if such fees are to be imposed; prohibits a lender from charging a fee for the first request in a calendar year for a written payoff calculation and permit a fee not to exceed $20 for each subsequent request in a calendar year; requires a lender to require an escrow account be established for taxes and insurance; prohibits a lender from using proceeds to repay the principal of an existing loan secured by the borrower's principal dwelling that is not a high-cost home loan; prohibits a lender from allowing a borrower to make payments that are applied only to interest and not to the principal; requires the lender to provide a borrower with timely notice of any material change in the terms of the high-cost loan; requires the lender to verify the borrower's income and financial resources and reasonable ability to repay the loan; creates a new section of KRS Chapter 367 to establish duties of a servicer who collects or processes payments on a residential mortgage loan; amends KRS 367.420 pertaining to home solicitation sales in which security is taken in the principal dwelling of the buyer to permit the buyer to rescind or cancel the transaction until midnight of the tenth, rather than the third, business day following the later of the consummation of the loan transaction or the delivery of the material disclosures required by the Truth in Lending Act.
 
Adopted 4/15/08
Urge Congress to take emergency action to enact a Homeowners and Banks Protection Act.
Louisiana
Signed by governor 6/21/08, Act 339
Relates to the removal of mortgage inscriptions affecting property subject to judicial sale; provides for the contents and filing of an affidavit by a title insurer; provides procedures for the removal of mortgage inscriptions; provides a cause of action for improper cancellation; provides for indemnification and exemption from liability under certain circumstances.
 
Signed by governor 7/8/08, Act 828
Provides that cancellation of a mortgage, whether legal, judicial, or conventional, shall allow any interested party to cancel the notice of seizure of property affected by the mortgage upon submitting a request to cancel evidencing that the mortgage has been canceled and upon submitting evidence that all costs due to the clerk of court and sheriff are paid in full.
 
Became law without governor's signature 6/16/08, Act 228
Authorizes the Louisiana Housing Finance Agency (LHFA) to establish a program to provide free mortgage foreclosure counseling and education to homeowners who have defaulted or are in danger of defaulting on their home mortgages and authorizes LHFA to work the Office of Financial Institutions (OFI). Authorizes LHFA to enter into agreements with other entities to carry out the program, establish a central toll-free telephone line, award grants for training of counselors, and establish standards for certification of such counselors. Authorizes LHFA to solicit contributions and grants from the private sector, nonprofit entities, and the federal government to assist in carrying out purposes of the program. Requires LHFA to submit an annual report to the Senate and House committees on commerce on the operation of the program.
Maine

L.D. 2189
Signed by governor 4/11/08, Chapter 596
Enacts measures designed to protect homeowners from equity stripping during foreclosures. This bill requires a business that engages in these transactions as a foreclosure purchaser to be licensed as a supervised lender before conducting business in this state and to meet other statutory requirements. Requires that a foreclosure purchaser must ensure that title is transferred back to the homeowner or that the foreclosure purchaser make a payment to the homeowner of at least 82 percent of the fair market value of the property within 150 days of when the homeowner is evicted or voluntarily gives back possession of the home. The bill requires that foreclosure purchasers verify that a foreclosed homeowner has a reasonable ability to make the payments needed to take back title to the home. The bill provides that there is a rebuttable presumption of a reasonable ability to pay if a homeowner's monthly payments for housing expenses and principal and interest payments do not exceed 60 percent of the owner's monthly gross income. The bill requires that the foreclosed homeowner receive counseling on the advisability of the transaction. Requires that the foreclosure purchaser provide a written contract and certain notices and disclosures to the homeowner. The bill gives a homeowner the right to cancel the transaction within five business days. Prohibits a foreclosure purchaser from making false, deceptive or misleading statements to homeowners and from using unfair or commercially unreasonable terms as part of foreclosure purchase transactions. The bill gives administrative enforcement authority to the Bureau of Consumer Credit Protection within the Department of Professional and Financial Regulation and imposes civil and criminal penalties for violations of the bill's provisions. The bill also gives a foreclosed homeowner the right to bring a private cause of action against a foreclosure purchaser for violations.

Maryland
Signed by governor 4/3/08, Chapter 6
Signed by governor 4/3/08, Chapter 5
Alters the applicability of specified provisions relating to the protection of homeowners in foreclosure; alters the contents of a foreclosure consulting contract; prohibits a foreclosure consultant from engaging in or arranging a foreclosure rescue transaction or receiving a commission or money under specified circumstances; requires a foreclosure consultant to be licensed as a real estate broker and to provide research on the value of a home to a homeowner.
 
Signed by governor 4/3/08, Chapter 2
Signed by governor 4/3/08, Chapter 1
Prohibits an action to foreclose a mortgage or deed of trust on residential property from being filed until 90 days after default and 45 days after a notice of intent to foreclose is sent, except under specified circumstances; requires personal service of an order to docket or a complaint to foreclose a mortgage or deed of trust on residential property; prohibits a foreclosure sale of residential property from occurring until 45 days after service; requiring one publication of notice of a foreclosure sale.
Michigan
Signed by governor 7/15/08, Public Act 216
Removes the Michigan Housing and Community Development Fund from the Department of Treasury and establish a fund of the same name within the Michigan State Housing Development Authority (MSHDA). Allows MSHDA to solicit and accept aid from any person, government, or entity on behalf of the Fund, and to receive money or other assets from any source, including Federal funds, for deposit into the Fund. Expands the Housing and Community Development Program to include the financing of development in a downtown area or adjacent neighborhood. Includes municipalities, land bank fast track authorities, and partnerships organized to develop projects in downtown areas or adjacent neighborhoods, among applicants eligible for funding. Extends the uses of the Fund to foreclosure prevention and assistance, individual development accounts, predatory lending prevention and relief, and activities related to ending homelessness.
 
Adopted 3/20/08
Memorializes the Congress of the United States to pass and the President to sign the Foreclosure Prevention Act of 2008.
 
Signed by governor 4/15/08, Public Act 54
Relates to the State Housing Finance Authority; expands financing for purchase of certain existing single-family residences to include refinancing.
Minnesota
Signed by governor 3/27/08, Chapter 362
Provides assistance to prevent mortgage foreclosure; increases the maximum amount of financial assistance.
 
Signed by governor 5/18/08, Chapter 341
Amends provisions relating to mortgage foreclosure; provides for foreclosure prevention counseling; prescribes preforeclosure and foreclosure notices.
 
Signed by governor 4/4/08, Chapter 178
Relates to mortgages; provides for proof of abandonment for purposes of a reduced mortgage foreclosure redemption period.
 
Signed by governor 4/4/08, Chapter 177
Relates to landlord and tenant; provides for certain notices relating to foreclosure.
 
Signed by governor 4/25/08, Chapter 238
Substituted 4/3/08
Relates to real property; provides specification of certain information about a premises subject to foreclosure; provides for electronic recording; requiring a report.
 
Indefinitely postponed 3/10/08
Signed by governor 4/4/08, Chapter 174
Amends the statute dealing with expungement of eviction information to require the court to order expungement in an eviction case commenced solely on the grounds that the tenant was holding over possession of the property, if the defendant occupied real property that was subject to a contract for deed cancellation or mortgage foreclosure and: (1) the time for cancellation or redemption had expired and the defendant vacated the property before commencement of the eviction action; or (2) the defendant was a tenant during the cancellation or foreclosure redemption period and did not receive the required notice to vacate on a date prior to commencement of the eviction case.
Nebraska
Signed by governor 3/10/08
Enacts the Nebraska Foreclosure Protection Act; places requirements on foreclosure consulting contracts. These requirements are generally “full disclosure” types of requirements put in place as a form of consumer protection. Addresses homeowners rights to cancel a foreclosure consulting contract. Outlines certain prohibited actions for foreclosure consultants. Addresses provisions of foreclosure consulting contracts and equity purchase contracts.
 
Signed by governor 3/19/08
Changes provisions relating to actions for the recovery of title or possession of real estate or foreclosure of mortgages; provides for the foreclosure of deeds of trust.
New Jersey
Signed by governor 9/15/08, Chapter 86
Substituted 6/23/08
This bill, entitled the "Save New Jersey Homes Act of 2008," requires creditors to provide a three year period of extension to borrowers who are obligated to repay introductory rate mortgage loans on residential properties under certain circumstances. As defined in the bill, an introductory rate mortgage provides for a introductory interest rate that resets after a period of time. The bill provides a period of extension, during which the introductory rate does not reset, to "eligible borrowers" whose mortgage interest rates are about to reset. The bill also provides a period of extension, during which the introductory rate does not reset and during which foreclosure proceedings are suspended, to "eligible foreclosed borrowers" whose mortgages are being foreclosed pursuant to the "Fair Foreclosure Act," P.L.1995, c.244 (C.2A:50-53 et seq.). The bill is intended to address an economic crisis resulting from the resetting of mortgage rates from low introductory rates to higher, variable rates, which is likely to contribute to the already increasing rate of defaults experienced by New Jersey homeowners. By providing a period of extension for existing mortgages, the bill allows time for creditors and borrowers to renegotiate more reasonable terms as to mortgage loans that are financially unworkable for the borrowers, so as to avoid foreclosures that result in a financial detriment to both creditor and borrower. The bill provides that prior to the date on which the interest rate will reset on an introductory rate mortgage, a creditor must provide to an eligible borrower a series of written notices, alerting the borrower to the impending interest rate reset, and providing certain information about the reset interest rate, any refinancing or renegotiation of the loan offered by the creditor, and the borrower's right to obtain a three year period of extension under the terms of the bill. The creditor must provide an eligible borrower with a three year period of extension, during which the interest rate on the introductory rate mortgage shall not increase above the original introductory rate, on the condition that the eligible borrower provides a certificate of extension to the creditor, prior to the date that interest rate resets under the terms of the introductory rate mortgage. The certificate of extension must contain certain statements, including that the eligible borrower: (1) is unable to pay the monthly payments that will apply after the date that the interest rate resets; (2) agrees to continue monthly payments calculated at the introductory interest rate, during the period of extension; (3) agrees to pay the creditor, at the time of transfer of the property, any interest deferred on account of the period of extension; and (4) agrees to accept the creditor’s placement of a subordinate lien on the property to secure the repayment of the interest deferred on account of the period of extension. An eligible borrower who makes a knowing material misrepresentation in a certificate of extension is guilty of a crime of fourth degree. A creditor who grants a period of extension to an eligible foreclosed borrower shall have the right to record a subordinate lien on the eligible foreclosed borrower’s property to secure the borrower’s repayment of the amount of interest deferred by the period of extension and any arrearages owed on the mortgage. The subordinate lien shall have the same priority as the lien of the introductory rate mortgage. An eligible borrower who fails to make the appropriate payments during the period of extension forfeits all rights concerning the deferment of interest payments and suspension of foreclosure. The bill also provides that a creditor that issues to an eligible foreclosed borrower a notice of intention to foreclose an introductory rate mortgage pursuant to the "Fair Foreclosure Act," P.L.1995, c.244 (C.2A:50-53 et seq.), shall send to the eligible foreclosed borrower a series of written notices, by regular and registered mail, separate and distinct from all other correspondence and written in plain language. The notices shall include: (1) A statement that the information in the notice is being provided as required by the “Save New Jersey Homes Act of 2008,” which was enacted by the New Jersey Legislature and which provides certain rights to borrowers who homes are the subject of a mortgage foreclosure action; (2) A list of alternatives to foreclosure that an eligible foreclosed borrower may pursue, including any refinancing of the loan offered by the creditor and any renegotiation of loan terms offered by the creditor; (3) An explanation of the eligible foreclosed borrower’s right to obtain a period of extension for three years and an explanation of the procedure that an eligible foreclosed borrower must follow to obtain a period of extension; and (4) A certification of extension form that can be completed by an eligible foreclosed borrower in order to obtain the period of extension. The notices shall be sent within 10 days of issuing the notice of intention and also at the time that the creditor applies for entry of final judgment of foreclosure. The notices shall be sent in envelopes with certain information on the outside front portion of the envelope that alerts the borrower to the enactment of the Save New Jersey Homes Act of 2008 and to the period of extension from foreclosure available under the act. The bill also provides that a creditor must provide an eligible foreclosed borrower with a three year period of extension, during which the interest rate on the introductory rate mortgage shall not increase above the original introductory rate, and during which foreclosure proceedings pursuant to the “Fair Foreclosure Act” are suspended. The creditor must grant this relief on the condition that the eligible foreclosed borrower provides a certification of extension to the creditor no later than 90 days of the date that the creditor applies for entry of final judgment of foreclosure. The certification of extension must contain certain statements, including that the eligible borrower agrees: (1) to continue monthly payments, with interest calculated at the introductory rate, during the period of extension; (2) to pay the creditor, at the time of transfer of the property, any interest deferred on account of the period of extension and any arrearages on the mortgage; and (3) to accept the creditor’s placement of a subordinate lien on the property to secure the repayment of the interest deferred on account of the period of extension, and any arrearages owed on the mortgage. A creditor who grants a period of extension to an eligible foreclosed borrower shall have the right to record a subordinate lien on the eligible foreclosed borrower’s property to secure the borrower’s repayment of the amount of interest deferred by the period of extension and any arrearages owed on the mortgage. The subordinate lien shall have the same priority as the lien of the introductory rate mortgage. An eligible foreclosed borrower who fails to make the appropriate payments during the period of extension forfeits all rights concerning the deferment of interest payments and suspension of foreclosure. Any person who violates any provision of the bill shall be liable to a penalty of not more than $10,000 for the first offense, and not more than $20,000 for the second and subsequent offense, which penalty may be collected in a summary proceeding pursuant to the “Penalty Enforcement Law of 1999,” P.L.1999, c.274 (C.2A:58-10 et seq.). The bill provides that its terms become effect immediately upon enactment, and remain in effect until January 1, 2011.
 
Signed by governor 12/1/08, Chapter 104
Substituted 11/24/08
Appropriates money for a grant in the amount of $2,500,000 to the New Jersey Housing and Mortgage Finance Agency for mortgage counseling; to the Department of Community Affairs for a grant in the amount of $9,500,000 to the New Jersey Housing and Mortgage Finance Agency for foreclosure mediation; and to the Administrative Office of the Courts the amount of $500,000 for foreclosure mediation.
 
Substituted 12/15/08
Signed by governor 1/9/09, Chapter 127
Creates the Mortgage Stabilization Program and Housing Assistance and Recovery Program; imposes additional requirements on lender foreclosing mortgage; appropriates $40 million from the “Long Term Obligation and Capital Expenditure Fund.”
New York
A.B. 10817
Substituted 6/23/08
S.B. 8143
Signed by governor 8/5/08, Chapter 472
Requires lender and mortgage loan servicers to give borrowers with high-cost home loans or higher-priced home loans notice before certain actions are taken; establishes all home loans shall be subject to certain standards and limitations; creates the crimes of residential mortgage fraud in the first, second, third, fourth and fifth degrees; relates to distressed property consulting contracts.
North Carolina
Signed by governor 8/17/08, Chapter 228
Requires mortgage services to send at least 45 days before foreclosure is initiated, a notice addressed to the borrower at the borrower's last known address with the following information: a.) An itemization of all past due amounts causing the loan to be in default. b.) An itemization of any other charges that must be paid in order to bring the loan current. c.) A statement that the borrower may have options available other than foreclosure, and that the borrower may discuss such options with the mortgage lender, the servicer, or a counselor approved by the U.S. Department of Housing and Urban Development. d.) The address, telephone number, and other contact information for the mortgage lender, the servicer, or the agent for either of them who is authorized to attempt to work with the borrower to avoid foreclosure. e.) The name, address, telephone number, and other contact information for one or more HUD-approved counseling agencies operating to assist borrowers in North Carolina to avoid foreclosure. f.) The address, telephone number, and other contact information for the consumer complaint section of the office of the commissioner of Banks.
 
Signed by governor 8/17/08, Chapter 226
Creates an emergency program to reduce home foreclosures and authorizes the commissioner of Banks to use funds for home foreclosure prevention.
Ohio
Signed by governor 6/11/08, Session Law 95
Enacts §2329.271 of the Revised Code to require purchasers of real property at a judicial sale to provide certain identifying information, allows municipal corporations to conduct inspections of property subject to a writ of execution, requires judicial sales to be confirmed within 30 days of sale, requires officers who sell real property at a judicial sale to file a deed within 14 days of confirmation, authorizes courts and county boards of revision to transfer certain tax delinquent lands subject to judicial foreclosure without appraisal or sale, permits a summary property description to be read at a judicial sale, and offers property that did not sell at a judicial sale to a political subdivision before forfeiture to the state.
 
Signed by governor 6/27/08, Session Law 126
Extends to all counties the authority to utilize surplus delinquent tax collections to facilitate nuisance abatement of deteriorated residential buildings in foreclosure and to terminate the temporary authority of a county with a population exceeding 1.2 million to use such collections to prevent residential mortgage foreclosures.
 
Signed by governor 1/6/09, Session Law 148
Enacts §§1901.185 and 3767.50 of the Revised Code to create a new cause of action in foreclosure in the environmental or housing division of a municipal court to abate nuisance properties.
 
Signed by governor 1/6/09, Session Law 135
Authorizes the creation of land reutilization corporations to facilitate the reclamation, rehabilitation, and reutilization of vacant, abandoned, tax-foreclosed, or other real property, revises the expedited, nonjudicial foreclosure procedure for abandoned lands, permits certain municipal corporations and other entities to cooperatively finance certain facilities with lodging tax-supported securities and other means regardless of when the municipal corporation had made a qualifying urban renewal designation, and to require port authorities to adopt plans of improvement.
Oregon
H.B. 3630, Special Session
Signed by governor 3/11/08, Chapter 19
Imposes duties and restrictions on foreclosure consultants. Requires that provision of foreclosure consulting services to homeowners be pursuant to written contract. Makes violation of foreclosure consulting laws unfair trade practice. Makes violation of foreclosure consulting laws criminal offense with maximum penalty of one year's imprisonment, $10,000 fine, or both. Applies to agreements for foreclosure services homeowner enters into 90 or more days after effective date of Act. Imposes duties and restrictions on equity purchasers. Requires that conveyance of homeowner equity in residence in foreclosure be pursuant to written contract. Makes violation of equity conveyance laws unlawful practice. Makes violation of equity conveyance laws criminal offense with maximum penalty of one year's imprisonment, $10,000 fine, or both. Creates private cause of action for damages arising from violation of equity conveyance laws. Applies to equity conveyance agreements equity seller enters into seven or more days after effective date of Act. Requires sending of notice of home loss danger to grantor of trust deed in residential property for which notice of foreclosure is filed. Requires that notice of home loss danger contain telephone numbers for grantor access to loan information and consultant services. Specifies effect of failure to send notice of home loss danger. Applies to residential trust deed properties for which statutory notice of sale is sent 90 or more days after effective date of Act. Requires Department of Consumer and Business Services to adopt rules specifying statewide telephone contact number and Website address where grantors of residential trust deeds receiving notice of home loss danger may find possible sources of information and assistance.
 
S.B. 1081, Special Session
Signed by governor 3/11/08, Chapter 45
Provides that the effective and applicable dates, and the exceptions, special rules and coordination with the Internal Revenue Code, as amended, relative to those dates, contained in the Energy Independence and Security Act of 2007 (P.L. 110-140), the Mortgage Forgiveness Debt Relief Act of 2007 (P.L. 110-142), the Tax Increase Prevention Act of 2007 (P.L. 110-166), the Tax Technical Corrections Act of 2007 (P.L. 110-172) and other federal law amending the Internal Revenue Code apply for Oregon personal income and corporate excise and income tax purposes, to the extent they can be made applicable, in the same manner as they are applied under the Internal Revenue Code and related federal law.
Pennsylvania
Signed by governor 7/8/08, Act 60
Provides for the Homeowner's Emergency Assistance Program, for notice and institution of foreclosure proceedings, for notice requirements, for assistance payments and for repayment; and provides for an ongoing foreclosure study.
Rhode Island
Became law without governor's signature 7/4/08, Chapter 238
Requires foreclosure deeds to be recorded within 30 days of the foreclosure sale and also requires that all outstanding real estate taxes be paid at the time of the recording of the foreclosure deed. In addition it changes the interest rate that mortgagees must pay an escrow from four percent to the interest rate.
 
Adopted 3/4/08, Resolution 92
Memorializes the United States Congress to take emergency action to protect homeowners and banks.
 
Became law without governor's signature 7/4/08, Chapter 352
Limits the amount of time that passes between the date of the first mortgage foreclosure advertisements and the date of the actual foreclosure auction sale. Resolves any ambiguity regarding advertising of mortgage foreclosure sales and allows for the possibility of a fourth mortgage foreclosure advertised notice.
 
Became law without governor's signature 7/8/08, Chapter 309
Requires foreclosure deeds to be recorded within 30 days of the foreclosure sale and also requires that all outstanding real estate taxes be paid at the time of the recording of the foreclosure deed. In addition it changes the interest rate that mortgagees must pay an escrow from four percent to the interest rate.
 
Adopted 2/27/08, Resolution 71
Memorializes the United States Congress to take emergency action to protect homeowners and banks.
 
Became law without governor's signature 7/8/08, Chapter 369
Provides a technical amendment to resolve any ambiguity regarding advertising of a mortgage foreclosure sale.
Tennessee
Signed by governor 4/10/08, Public Chapter 743
Allows notice of foreclosure to be sent to debtor at address designated by debtor in any loan document, correspondence, or information from the creditor, and if none, then last known address; allows notice of foreclosure to be sent to debtor at location of the property unless property is vacant, commercial or debtor has designated different address.
Vermont

H.J.R. 49
Adopted 5/3/08
Urges Congress to adopt an emergency bank and homeowner protection act. 

Virginia
Signed by governor 3/8/08, Chapter 485
Makes persons participating in or servicing foreclosure rescues for profit with the intent to defraud a consumer a violation of the Virginia Consumer Protection Act.
 
Signed by governor 4/23/08, Chapter 878
Requires high-risk mortgage lenders or servicers to provide written notice of the intention to send a notice to accelerate the loan balance 10 business days prior to sending the notice of acceleration. If the borrower indicates the desire to avoid foreclosure, the high-risk mortgage lender or servicer shall give the borrower 30 calendar days' forbearance. The measure does not apply if the lender makes fewer than four mortgage loans in any 12-month period, if there is an active bankruptcy proceeding, or if a foreclosure sale is scheduled to occur within 30 days.
Washington
Signed by governor 3/31/08, Chapter 278
Requires a distressed property purchaser and foreclosed homeowner to enter into a distressed property reconveyance in the form of a written contract. Establishes the contract requirements. Makes a violation of the chapter a violation of the consumer protection act.
 
Signed by governor 4/1/08, Chapter 322
Establishes the smart homeownership choices program in the Department of Financial Institutions to assist low-income and moderate-income households facing foreclosure. Makes an appropriation from the general fund solely for deposit in the smart homeownership choices program account. Requires the department of financial institutions to enter into an interagency agreement with the Washington state housing finance commission to implement and administer the program. Requires the Washington state housing finance commission to assist homeowners who are delinquent on their mortgage payments to bring their mortgage payments current in order to refinance into a different loan product.

 

 

 

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