TITLE 6

Commerce and Trade

SUBTITLE II

Other Laws Relating to Commerce and Trade

CHAPTER 24B. FORECLOSURE CONSULTANTS AND RECONVEYANCES

Subchapter III. Foreclosure Reconveyances


(a) 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 TRANSFER OF DEED OR TITLE".

(b) The "Notice of Transfer of Deed or Title" shall:

(1) Contain the entire agreement of the parties;

(2) Be printed in at least 12-point type;

(3) Be dated and personally signed, with each page being initialed by both the homeowner of the residence in foreclosure and the foreclosure purchaser and witnessed and acknowledged by a notary public in the presence of the homeowner at the time the contract is signed by the homeowner;

(4) Describe in detail the terms of any foreclosure reconveyance including:

a. The name, business address, telephone number, and facsimile number of the person to whom the deed or title will be transferred;

b. The address of the residence in foreclosure;

c. The total consideration to be given by the foreclosure purchaser, the foreclosure consultant, and any other party as a result of the transfer;

d. The time at which title is to be transferred to the foreclosure purchaser and the terms of any conveyance;

e. Any financial or legal obligations that the homeowner may remain subject to, including a description of any mortgages, liens, or other obligations that will remain in place;

f. A description of any services of any nature that the foreclosure purchaser will perform for the homeowner before or after the sale or transfer;

g. A complete description of the terms of any related agreement designed to allow the homeowner to remain in the home, including the terms of any rental agreement, repurchase agreement, contract for deed, land installment contract, or option to buy, and any provisions for eviction or removal of the homeowner in the case of late payment; and

h. How any repurchase price or fee associated with any transfer of title or deed back to the homeowner will be calculated; and

(5) Contain the following statement printed in at least 14-point bold-face type and located in immediate proximity to the space reserved for the homeowner's signature:

If you change your mind about transferring ownership of your property, you, the homeowner, may cancel or rescind the transfer of the deed or title to your property at any time before midnight of the third business day that begins the day after you sign the deed or title.

To rescind this transaction, mail or deliver a signed and dated copy of the Notice of Rescission provided, or any other written notice indicating your intent to rescind, to [name of foreclosure purchaser] at [address of foreclosure purchaser].

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.

(c) 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" which shall:

(1) Be on a separate sheet of paper attached to the Notice of Transfer of Deed or Title;

(2) Be easily detachable; and

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

NOTICE OF RIGHT TO RESCIND TRANSFER OF DEED OR TITLE

[Date]

You may cancel or rescind the transfer of ownership of your property through the transfer of a deed or title before midnight of the third business day that begins the day after you sign the deed or title.

To rescind or cancel this transaction, mail or deliver a signed and dated copy of the Notice of Rescission, or any other written notice expressing a similar intent to [name of foreclosure purchaser] at [address of foreclosure purchaser].

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.

NOTICE OF RESCISSION

To:       [Name of foreclosure purchaser]

      [Address of foreclosure purchaser]

I hereby rescind the transfer of deed or title to my property. Please return all executed documents to me.

[Signature date]              [Homeowner's signature]

(d) The foreclosure purchaser shall provide the homeowner with a copy of the Notice of Right to Rescind Transfer of Deed or Title immediately on execution of any document that includes a foreclosure reconveyance.

(e) The time during which the homeowner may rescind the contract or transfer does not begin to run until the foreclosure purchaser has complied with this section.

(f) A foreclosure reconveyance may not be carried out using a power of attorney from the homeowner.

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

(h) The right to rescind may not be conditioned on the repayment of any funds.

(i) Within 10 days after receipt of a notice of rescission, the foreclosure purchaser shall return, without condition, any original deed, title, contract, and any other document signed by the homeowner.

(j) During the 3-day rescission period, a deed or other document affecting title to the homeowner's residence in foreclosure may not be recorded.

76 Del. Laws, c. 419, § 1.;

Any provision in an agreement concerning a foreclosure reconveyance 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 foreclosure purchaser may not:

(1) Enter into, or attempt to enter into, a foreclosure reconveyance with a homeowner unless:

a. The foreclosure purchaser verifies and can demonstrate that the homeowner has or will have a reasonable ability to pay for the subsequent reconveyance of the property back to the homeowner on completion of the terms of a foreclosure reconveyance, or, if the foreclosure reconveyance provides for a lease with an option to repurchase the property, the homeowner has or will have a reasonable ability to make the lease payments and repurchase the property within the term of the option to repurchase;

b. The foreclosure purchaser and the homeowner complete a settlement before any transfer of an interest in the property is effected; and

c. The foreclosure purchaser complies with the requirements of the federal Home Ownership Equity Protection Act, 15 U.S.C. § 1639, and its implementing regulations for any foreclosure reconveyance in which the homeowner obtains a vendee interest in a contract for deed;

(2) Fail to:

a. Ensure that the title to the property has been reconveyed to the homeowner in a timely manner if this subchapter or the terms of a foreclosure reconveyance agreement require a reconveyance; or

b. Make payment to the homeowner within 90 days of any resale of the property so that the homeowner receives cash payments or consideration in an amount equal to at least 82% of the net proceeds from any resale of the property should a property subject to a foreclosure reconveyance be sold within 18 months after entering into a foreclosure reconveyance agreement;

(3) Enter into repurchase or lease terms as part of the foreclosure conveyance that are unfair or commercially unreasonable, or engage in any other unfair conduct;

(4) Represent, directly or indirectly, that:

a. The foreclosure purchaser is acting as an advisor or a consultant, or in any other manner represent that the foreclosure purchaser is acting on behalf of the homeowner;

b. The foreclosure purchaser has certification or licensure that the foreclosure purchaser does not have; or

c. The foreclosure purchaser is assisting the homeowner to "save the house" or use a substantially similar phrase;

(5) Make any other statements, directly or by implication, or engage in any other conduct that is false, deceptive, or misleading, or that has the likelihood to cause confusion or misunderstanding, including statements regarding:

a. The value of the residence in foreclosure;

b. The amount of proceeds the homeowner will receive after a foreclosure sale;

c. Any contract term; or

d. The homeowner's rights or obligations incident to, or arising out of, the foreclosure reconveyance; or

(6) Until the homeowner's right to cancel the transaction has expired:

a. Record any document, including an instrument of conveyance, signed by the homeowner; or

b. Transfer or encumber or purport to transfer or encumber any interest in the residence in foreclosure to any third party.

76 Del. Laws, c. 419, § 1.;

(a) For the purposes of § 2425B(1)a. of this title, there is a rebuttable presumption that:

(1) A homeowner has a reasonable ability to pay for a subsequent reconveyance of the property if the homeowner's payments for primary housing expenses and regular principal and interest payments on other personal debt, on a monthly basis, do not exceed 60% of the homeowner's monthly gross income; and

(2) The foreclosure purchaser has not verified reasonable payment ability if the foreclosure purchaser has not obtained documents other than a statement by the homeowner of assets, liabilities, and income.

(b) The foreclosure purchaser shall make a detailed accounting of the basis for the amount of a payment made to the homeowner of a property resold within 18 months after entering into a foreclosure reconveyance agreement in accordance with § 2425B(2)b. of this title. The accounting shall include documentation of expenses and other consideration paid by the foreclosure purchaser and deducted from the resale price.

(c) A bona fide purchaser for value or bona fide lender for value who enters into a transaction with a homeowner or a foreclosure purchaser when a foreclosure consulting contract is in effect or during the period when a foreclosure reconveyance may be canceled, without notice of those facts, receives good title to the property, free and clear of the right of the parties to the foreclosure consulting contract or the right of the homeowner to rescind the foreclosure reconveyance.

(d) This subchapter may not be construed to impose any duty on a purchaser, title insurer, or title insurance producer with respect to the application of the proceeds of a sale of property by a foreclosure purchaser.

76 Del. Laws, c. 419, § 1.;