2007 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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S.B. 907
Signed by governor 3/30/07, Act 721
Amends the statutory foreclosure act; provides that a mortgagor may assert fraud or the failure to strictly comply with the act's provisions as a claim or defense against the mortgagee or trustee.


H.B. 1157
Signed by governor 6/1/07, Chapter 404
Requires a court in an action for unlawful detention of real property following a foreclosure sale (sale) to dispense with appearances by the plaintiff and a hearing in certain circumstances. States that the acts of a deputy public trustee shall have the same effect as though performed by the public trustee. Entitles a public trustee to receive a $100 fee for processing a rescission of a sale and a $50 fee for rescheduling a sale after a rescission. Changes the time by which a public trustee or sheriff (officer) processing a foreclosure shall send notice of the foreclosure to persons on an amended mailing list provided by the holder of the evidence of debt from 60 to 45 days before the actual date of sale. Specifies that certain persons may cure a default in the terms of a lien being foreclosed, unless a court determines that there is a reasonable probability that a default other than nonpayment of sums due has occurred. States that the use of a good faith estimate shall not change or extend the period or effective date of a statement of all sums necessary to cure a default. Allows a bid submitted for a sale to be modified orally at the time of the sale only if the person amending the bid is physically present at the sale and modifies and reexecutes the bid. Changes the maximum period by which the officer may continue a sale for good cause or at the request of the holder of the evidence of debt from 9 to 12 months. States that a lienor who accepts a redemption amount less than the full amount of a lien or a holder of an evidence of debt who accepts a redemption amount less than the amount bid at sale before the redemption periods expire shall not be entitled to any excess proceeds from the sale. Directs a public trustee or sheriff to establish written policies for determining how the public trustee or sheriff shall accept documents or records in electronic form by July 1, 2007. If the successful bidder at a sale is the holder of the evidence of debt foreclosing the deed of trust or other lien, allows the successful bidder, the bidder's attorney or assignee, or the assignee's attorney to rescind the sale without a court order within eight business days after the sale. Requires the public trustee to confirm the reinstatement by an indorsement that substantially meets a specified form. Allows the holder of the evidence of debt to direct the public trustee to reschedule a sale that was rescinded. Limits claims by a person arising from a rescission of a sale to actual damages. Specifies that moneys payable as a refund for overpayment of a cure or default or for overpayment of a redemption that remain unclaimed for one year are presumed abandoned and shall be paid to the state treasurer in accordance with the "Unclaimed Property Act". Shortens the period during which a lienor who wishes to redeem a property shall file a notice of intent to redeem from 10 to eight business days after the sale. Changes the deadline for the holder of a certificate of purchase to provide a statement of all sums necessary to redeem and per diem interest from 14 to 13 business days after the sale. Shortens the maximum redemption period for the junior lienor with the most senior recorded lien from 20 to 19 business days after the sale. Clarifies the interest rate that a redeeming lienor is required to pay on the amount of the sale. Requires an officer to attach to the certificate of purchase issued following the sale a copy of the court order authorizing the sale and a copy of the mailing lists for notice of the sale. Specifies the information that a separate assignment of a certificate of purchase or redemption shall contain. States that the lien represented by a certificate of purchase shall have the same priority as the deed of trust or other lien foreclosed. States that the indemnity granted by a holder of an original evidence of debt that requests the release of a deed of trust without producing or exhibiting the original evidence of debt is limited to actual economic loss, along with court costs and reasonable attorney fees, and does not cover special, incidental, consequential, reliance, expectation, or punitive damages. Increases the amount of the corporate surety bond provided by a holder who requests the release of a deed of trust without producing or exhibiting the original evidence of debt from one to 1.5 times the original principal amount of the deed of trust.


S.B. 85
Signed by governor 6/1/07, Chapter 387
Prohibits a mortgage broker from improperly influencing a real estate appraisal and makes such improper influencing a deceptive trade practice. Specifies criminal penalties for such misconduct. Authorizes the director of the division of registrations in the department of regulatory agencies to promulgate rules and to revoke a mortgage broker's registration when the broker has improperly influenced a real estate appraisal or has, in the previous five years, been enjoined by a court in any state from brokering a mortgage. Authorizes public trustees to rerecord a notice of election and demand and proceed with foreclosure proceedings after missing a notice deadline. Authorizes public trustees to correct errors contained in documents prepared by the public trustee by filing a scrivener's error affidavit. Exempts reverse mortgages from mortgage brokers' and mortgage originators' duty to consider a consumer's ability to repay a mortgage. Appropriates $56,696 and 0.3 FTE to the department of regulatory agencies for the implementation of the act.


H.B. 7236
Signed by governor 6/11/07, Public Act 120
Clarifies provisions concerning the award of costs and attorney's fees in an action of foreclosure of a mortgage or lien or an action upon a bond which has been substituted for a mechanic's lien.

 Delaware H.B. 250
Signed by governor 7/1/07, Chapter 80
Appropriates funding for a study of foreclosures and consumer protection in Delaware.
District of Columbia
Signed by mayor, eligible for congressional review 11/27/07, Act A17-0205
Prohibits equity stripping through unscrupulous real property transactions and protects financially distressed homeowners.
 Illinois S.B. 258
Signed by governor 8/17/07, Public Act 95-0262
Amends the Code of Civil Procedure. Provides that, in a case of foreclosure where the tenant is current on his or her rent, any order of possession must allow the tenant to retain possession of the property covered in his or her rental agreement (i) for 120 days following the notice of the hearing on the supplemental petition that has been properly served upon the tenant, or (ii) through the duration of his or her lease, whichever is shorter. Provides that the exception for continued possession by the tenant only applies if the tenant continues to pay his or her rent in full during the 120-day period.
  S.B. 1167
Signed by governor 11/2/07, Public Act 95-0691
Amends the Home Equity Assurance Act. Provides that a governing commission with no less than $4,000,000 in its guarantee fund, may, if authorized by referendum, establish a Foreclosure Prevention Loan Fund to provide low interest emergency loans to eligible applicants that may be forced into foreclosure proceedings. Provides that if a majority of the voters on the public question approve the creation of a Foreclosure Prevention Loan Fund, the commission shall establish the program and administer the program with funds collected under the Guaranteed Home Equity Program, subject to specified conditions. Amends the Residential Mortgage License Act of 1987. Contains provisions concerning the issuance of written interpretations of the Act by the Department of Financial and Professional Regulation. Provides that the attorney general may enforce violations of specified provisions. Specifies the criteria for a private right of action under specified provisions. Provides that a licensee must follow specified rules concerning the verification of a borrower's ability to repay a residential mortgage loan. Provides that a mortgage broker shall be considered to have created an agency relationship with the borrower in all cases and shall comply with specified duties. Contains provisions concerning prepayment penalties by a licensee. Provides that a licensee must follow specified rules concerning notices of change in loan terms. Contains provisions concerning a licensee's duties with respect to (1) comparable monthly payment quotes, (2) the requirement to provide a borrower with a copy of all appraisals, and (3) the disclosure of refinancing options. Contains a prohibition on (1) financing certain insurance premiums, (2) equity stripping and loan flipping, (3) financing certain insurance premiums, and (4) encouraging default. Provides for the disclosure of refinancing options. Amends the Residential Property Disclosure Act. Provides that a predatory lending database program shall be established within Cook County and shall be administered in accordance with the Article. Provides that the inception date of the program shall be July 1, 2008. Contains provisions concerning the predatory lending database program. Adds provisions concerning the information to be contained in the predatory lending database program. Provides the standards for loan counseling. Provides that borrowers applying for reverse mortgage financing of residential real estate including under programs regulated by the Federal Housing Authority (FHA) that require HUD-certified counseling are exempt from the program and may submit a HUD counseling certificate to comply with the program. Changes the definitions of "distressed property purchaser" and "distressed property conveyance" in the Mortgage Rescue Fraud Act. Amends the Interest Act to provide that the lender, in the case of any nonexempt residential mortgage loan, as defined in specified provisions, shall have the right to include a prepayment penalty that extends no longer than the fixed rate period of a variable rate mortgage provided that, if a prepayment is made during the fixed rate period and not in connection with the sale or destruction of the dwelling securing the loan, the lender shall receive an amount that is no more than specified amounts.
 Indiana H.B. 1753
Signed by governor 5/4/07, Public Law 176
Authorizes the Indiana housing and community development authority (authority) to establish a program to provide free mortgage foreclosure counseling and education to homeowners who have defaulted on or are in danger of defaulting on the mortgages on their homes. Provides that the program may include a central toll free telephone number that homeowners may call to receive mortgage foreclosure counseling and education. Authorizes the authority to award grants for the training of counselors who will provide mortgage foreclosure counseling and education. Provides that the authority may establish standards for the certification of counselors. Provides that the authority may solicit contributions and grants from the private sector, nonprofit entities, and the federal government to assist in carrying out the program. Requires the authority to submit a report to the legislative council annually.
  S.B. 390
Signed by governor 5/10/07, Public Law 209
Establishes notice requirements regarding foreclosures on real property. Provides that a homeowner may rescind: (1) contracts with foreclosure consultants; and (2) foreclosure reconveyance agreements. Provides that a homeowner may rescind a foreclosure reconveyance agreement at any time before midnight of the seventh business day after the homeowner's transfer of the interest in the real property that is the subject of the agreement. Requires a homeowner who rescinds: (1) a contract with a foreclosure consultant; or (2) a foreclosure conveyance agreement; to repay certain amounts advanced in connection with the contract or the agreement not later than 30 days after the date of rescission. Prohibits foreclosure consultants and foreclosure purchasers from certain actions. Requires foreclosure purchasers to: (1) ensure that title to real property is reconveyed to the homeowner in a timely manner if reconveyance is required under a foreclosure reconveyance agreement; or (2) pay the homeowner an amount equal to 82 percent of the net proceeds from any resale of the property, if the property is sold within 18 months of entering into the agreement. Requires a foreclosure purchaser to make a detailed accounting of the basis for the amount of payment made to the homeowner if the real property is resold within 18 months. Provides that a violation of the statute concerning mortgage rescue protection fraud is a deceptive act that is actionable by the attorney general. Allows a homeowner to bring an action for damages for a violation of the mortgage rescue protection fraud laws. Allows a court to award treble damages for a willful or knowing violation of the mortgage rescue protection fraud laws. Requires the Indiana housing and community development authority to maintain a list of nonprofit organizations that offer counseling or advice to homeowners in foreclosure or loan defaults. Excludes certain banks, trust companies, governmental entities, attorneys, and other persons from the law. Makes a violation of the mortgage rescue protection fraud laws a Class A misdemeanor.
 Iowa H.F. 777
Signed by governor 4/16/07, Chapter 71
Relates to the rescission of a foreclosure action. Under the bill, if a foreclosure action is rescinded by a judgment creditor, and the original mortgage and mortgage note are in the court file, the mortgagor shall pay a $25 fee to the clerk of the district court prior to receiving the original mortgage and mortgage note from the clerk.
 Maine L.D. 868
Signed by governor 5/11/07, Public Law 103
Amends the laws governing civil action foreclosure to require that the judgment of foreclosure entered by the court and evidence of compliance with the notice and public sale requirements be attached to or included within the deed, or both, or otherwise be recorded in the registry of deeds.
  L.D. 1244
Signed by governor 6/19/07, Public Law 326
Gives the Maine State Housing Authority the power to make a loan or enter into a contract with a financial institution to make a loan on behalf of the Maine State Housing Authority to pay off an existing loan on a single-family residence to assist a homeowner who is in default of the existing loan and in danger of losing the residence through foreclosure.
  L.D. 1617
Signed by governor 6/21/07, Public Law 391
Repeals the laws that permit foreclosure of a mortgage on real property by possession and by sale of the property, also known as strict foreclosure.
 Massachusetts H.B. 4387
Signed by governor in part 11/29/07, Chapter 206
Protects and preserves home ownership and mortgage protection; relates to the licensing of loan originators, disbursement of public funds for the costs incurred by the division of banks for administrative fees and from civil administrative penalties; provides a pilot program for first-time homeowner counseling and best lending practices; requires the commissioner of banking to maintain a foreclosure database; relates to foreclosure, subprime loans and adjustable interest rates; provides that no mortgagee shall make a subprime loan at a variable or adjustable rate of interest unless the mortgagor opts in writing for the variable or adjustable rate subprime loan and receives certification of loan counseling with a qualified third party; provides that a tenant occupying a dwelling in foreclosure shall be deemed a tenant at will as specified.
 Minnesota H.F. 1209
Indefinitely postponed 4/25/07
S.F. 1533
Signed by governor 5/21/07, Chapter 106
Regulates certain transactions with homeowners whose homes are in foreclosure.
 Nebraska L.B. 99
Signed by governor 3/8/07
Amends N.R.S. §25-1081 by adding circumstances under which a receiver may be appointed by the district court. The additional circumstances are as follows: in an action to foreclose a trust deed as a mortgage; in connection with the exercise of power of sale under a trust deed and following the filing of a notice of default under the Nebraska Trust Deeds Act; in an action brought to enforce a written assignment of rents provision contained in any agreement that provides for the appointment of a receiver; and in any case in which either a mortgagor or trustor has agreed to the appointment of a receiver in writing.
 Nevada A.B. 440
Signed by governor 6/13/07, Chapter 492
Establishes specific rights and duties concerning foreclosure consultants and foreclosure purchasers.
  A.B. 560
Signed by governor 5/14/07, Chapter 50
Under existing law, the balance of any proceeds of a foreclosure sale on real property remaining after the payment of the expenses relating to the sale, the obligation being enforced by the sale and any other obligations secured by the property is required to be paid to the debtor or his successor in interest. (NRS 40.462) This bill authorizes a debtor and a third party to enter into an agreement pursuant to which the third party assists the debtor in the recovery of the balance of any proceeds due to the debtor after a foreclosure sale and establishes the requirements for such an agreement. This bill also requires that fees charged by third parties pursuant to such agreements must be reasonable and provides a presumption that fees which exceed $2,500 are unreasonable. A third party seeking a fee that exceeds $2,500 is authorized to apply to a court for permission to charge the higher fee.
 New Hampshire H.B. 365
Signed by governor 7/16/07, Chapter 322
Establishes the regulation of foreclosure consultants and regulates pre-foreclosure conveyancing. The bill establishes criminal and civil penalties for violations.
 New Mexico H.B. 558
Signed by governor 4/2/07, Chapter 156
Relates to real estate deeds of trust; designates priority and time periods for redemption rights after judicial foreclosure; amends the deed of trust act.
  H.B. 732
Signed by governor 3/30/07, Chapter 95
Relates to actions affecting property; increases the homestead exemption and the property exemption in lieu of the homestead exemption; reconciles conflicting amendments to the same section of law in laws 1979.
 New York A.B. 7376
Enacting clause stricken 5/21/07
A.B. 8630
Substituted 6/11/07
S.B. 4210
Signed by governor 8/1/07, Chapter 458
Adds a new §1320 to the Real Property Actions and Proceedings Law ("RPAPL") and amends CPLR 3215(g)(3)(iii) to provide additional notice to mortgagors that a foreclosure action has been commenced.
  A.B. 8365
Signed by governor 7/3/07, Chapter 154
S.B. 4958
Relates to making various technical corrections to the banking law and the real property actions and proceedings law. Amends §1303(1) of the Real Property Actions and Proceedings Law to clarify that the notice requirements of this section apply only in the case of mortgage foreclosure actions which involve residential real property consisting of owner-occupied one-to-four family dwellings.
 North Carolina H.B. 947
Signed by governor 8/16/07, Chapter 353
Requires that a notice of sale in foreclosure proceedings be sent to certain tenants residing in the property to be sold, allows those tenants after receiving the notice to terminate the rental agreement upon 10 days' written notice to the landlord, requires that those tenants be given 30 days' notice of an application for an order for possession, and clarifies that the proceeds in the automation enhancement and preservation fund may be used for the preservation and storage of public records.
  H.B. 1374
Signed by governor 8/16/07, Chapter 351
S.B. 1264
(1) Overturns the Shepard case and amends the limitation regarding actions to recover for usury; (2) overturns the Skinner case and amends the long-arm statute to allow North Carolina courts to exercise personal jurisdiction over certain nonresident defendants; (3) requires that a notice of foreclosure contain certain information; and (4) provides for mortgage debt collection and servicing.
 North Dakota S.B. 2216
Signed by governor 3/9/07
Creates and enacts a new section to chapter 32-19 of the North Dakota Century Code, relating to payment to redeem; and amends and reenacts §32-19-22 of the North Dakota Century Code, relating to the service of notice before foreclosure.
  S.B. 2277
Signed by governor 4/13/07
Provides for notice requirements for the sale of real property taken on execution.
 Oregon S.B. 302
Signed by governor 6/20/07, Chapter 495
Allows judicial sale of property to occur after death of property owner if sale is pursuant to judgment of foreclosure and sale.
 Rhode Island H.B. 5357
Became law without governor's signature 7/7/07, Chapter 340
Makes technical amendments to provisions regarding private causes of action against foreclosure consultants.