TITLE 6

Commerce and Trade

SUBTITLE II

Other Laws Relating to Commerce and Trade

CHAPTER 24B. FORECLOSURE CONSULTANTS AND RECONVEYANCES

Subchapter II. Foreclosure Consultants


(a) A foreclosure consulting contract shall be in writing and provided to the homeowner, without changes, alterations, or modification, for review at least 24 hours before it signed by the homeowner.

(b) A foreclosure consulting contract shall be printed in at least 12-point type and shall include the name and address of the foreclosure consultant to which a Notice of Cancellation can be mailed and the date the homeowner signed the contract.

(c) A foreclosure consulting contract shall fully disclose the exact nature of the foreclosure consulting services to be provided and the total amount and terms of any compensation to be received by the foreclosure consultant.

(d) A foreclosure consulting contract shall be dated and personally signed, with each page being initialed, by both the homeowner of the residence in default and the foreclosure consultant and shall be witnessed and acknowledged by a notary public in the presence of the homeowner at the time the contract is signed by the homeowner.

(e) A foreclosure consulting contract shall contain the following notice, which shall be printed in at least 14-point bold-face type, completed with the name of the foreclosure consultant, and located in immediate proximity to the space reserved for the homeowner's signature:

NOTICE REQUIRED BY DELAWARE LAW

[Name of foreclosure consultant] or anyone working for that company or individual CANNOT ask you to sign or have you sign any lien, mortgage or deed as part of signing this agreement unless the terms of the transfer or encumbrance are specified in this document and you are given a separate explanation of the precise nature of the transaction.

[Name of foreclosure consultant] or anyone working for that company or individual CANNOT guarantee you that they will be able to refinance your home or arrange for you to keep your home. Continue making mortgage payments until a refinancing, if applicable, is approved.

You may at any time cancel this contract, without penalty of any kind. If you want to cancel this contract, mail or deliver a signed and dated copy of the Notice of Cancellation, or any other written notice indicating your intent to cancel, to [name and address of the foreclosure consultant].

As part of any cancellation, you, the homeowner, must repay any money actually spent on your behalf by [name of foreclosure consultant] prior to receipt of this notice and as a result of this agreement, within sixty days, along with interest at the primary credit rate established by the United States Federal Reserve Board plus 2 percentage points, with the total interest rate not to exceed 8% per year.

THIS IS AN IMPORTANT LEGAL CONTRACT AND COULD RESULT IN THE LOSS OF YOUR HOME. CONTACT AN ATTORNEY FOR LEGAL ADVICE OR A HOUSING COUNSELOR APPROVED BY THE FEDERAL DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FOR OTHER OPTIONS WITH YOUR LENDER BEFORE SIGNING.

(f) A completed form in duplicate, entitled "NOTICE OF CANCELLATION'', shall accompany the foreclosure consulting contract. The Notice of Cancellation shall:

(1) Be on a separate sheet of paper attached to the contract;

(2) Be easily detachable; and

(3) Contain the following statement, printed in at least 14-point type:

NOTICE OF CANCELLATION

Date of Contract: [Contract date]

To:       [Name of foreclosure consultant]

      [Address of foreclosure consultant]

I hereby cancel this contract.

[Signature date]              [Homeowner's signature]

(g) A notice of cancellation need not take the particular form specified in this subchapter or any form contained in any agreement with the foreclosure consultant, and is effective, however expressed, if it indicates the intention of the homeowner to cancel the foreclosure consulting contract.

(h) If a foreclosure reconveyance is included in a foreclosure consulting contract or arranged after the execution of a foreclosure consulting contract, the foreclosure purchaser shall provide the homeowner with a document entitled "NOTICE OF RIGHT TO RESCIND TRANSFER OF DEED OR TITLE" in the form required under subchapter III of this chapter.

(i) The foreclosure consultant shall provide to the homeowner a signed, dated, and acknowledged copy of the foreclosure consulting contract and the attached Notice of Cancellation immediately upon execution of the contract.

76 Del. Laws, c. 419, § 1; 78 Del. Laws, c. 196, § 7.;

Any provision in a foreclosure consulting contract that attempts or purports to waive the homeowner's rights under this chapter, consent to jurisdiction for litigation or choice of law in a state other than this State, consent to a venue in a county other than the county in which the property is located or impose any costs or filing fees greater than the actual costs and fees, is void.

76 Del. Laws, c. 419, § 1.;

(a) A foreclosure consultant may not:

(1) Claim, demand, charge, collect, or receive any compensation until after the foreclosure consultant has fully performed each and every service the foreclosure consultant contracted to perform or represented that the foreclosure consultant would perform;

(2) Claim, demand, charge, collect, or receive any interest or any other compensation for any loan that the foreclosure consultant makes to the homeowner that exceeds 8% per year;

(3) Take any wage assignment, any lien, or any type of real or personal property, or other security to secure the payment of compensation;

(4) Receive any consideration from any third party in connection with foreclosure consulting services provided to a homeowner unless the consideration is first fully disclosed in writing to the homeowner;

(5) Acquire any interest, directly or indirectly, or by means of a related person, in a residence in default from a homeowner with whom the foreclosure consultant has contracted;

(6) Take any power of attorney from a homeowner to enter into a foreclosure consulting contract that does not comply in all respects with this subchapter; or

(7) Facilitate or engage in any transaction that is unconscionable under the terms and circumstances of the transaction.

(b) No person may engage in any of the activities identified in § 2402B(1) or (3) of this title if such activities are prohibited by § 910 of Title 11.

(c) No person may engage in any of the activities identified in § 2402B(1) or (3) of this title for which registration is required under Chapter 24 of this title, unless such person has registered and fulfilled all other applicable requirement of that chapter.

76 Del. Laws, c. 419, § 1; 78 Del. Laws, c. 196, § 8.;