NHLA Spearheads Passage of Foreclosure Rescue Scam Legislation

 

NHLA Spearheads Passage of Foreclosure Rescue Scam Legislation

New Hampshire Legal Assistance spearheaded the passage of cutting-edge legislation that regulates foreclosure rescue scams. With foreclosures occurring in record numbers, especially on sub-prime mortgages, New Hampshire’s vulnerable low-income homeowners risked falling prey to “foreclosure rescue” scams. Complicated deals that appeared to save a home actually involved transfer of ownership to the scammer, under circumstances that made it practically impossible for the resident to regain ownership. Ultimately, former homeowners faced eviction because they could not make rental payments to the scammer, while the scammer made away with all of the homeowner's hard-earned equity. The new law, RSA 479-B, enumerates prohibited practices for foreclosure consultants, imposes disclosure requirements, and allows the homeowner to cancel the deal so as to regain title to the home. RSA 479-B also creates a private right of action with strong legal remedies under New Hampshire’s Consumer Protection Act. With support from the National Consumer Law Center and the Center for Responsible Lending, NHLA drafted the bill and worked in conjunction with the New Hampshire Banking Department, the New Hampshire Housing Finance Authority, the New Hampshire Bankers' Association, the New Hampshire Association of Realtors, and the Mortgage Bankers and Brokers Association of New Hampshire to pass it with strong bipartisan support from both houses. Governor John Lynch signed the bill on July 24, 2007, and it became effective immediately.

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