New law strengthens homeowner protections


Gov. Jack Markell signed legislation into law this week clarifying protections of homeowners in foreclosure. House Bill 232 clarifies that companies that offer to negotiate modifications of secured debt, such as a mortgage, on behalf of consumers are subject to the provisions of the Mortgage Rescue Fraud Protection Act, which prevents companies from charging homeowners who are in foreclosure thousands of dollars in up-front fees to negotiate with loan servicers or lenders.

“Homeownership is good for families’ personal finances and it’s good for our economy,” Markell said. “It is important that we help homeowners stay in their homes and protect their most important asset, especially during this downturn in the national economy.”

“Mortgage ‘rescue’ companies have the upper hand when negotiating with financially-distressed homeowners struggling to keep their homes,” stated Attorney General Joseph R. “Beau” Biden III. “This legislation makes it crystal clear that these vulnerable homeowners are protected under Delaware law from predatory practices.”

This week’s bill-signing ceremony is part of action initiated by the State this year to respond to the foreclosure crisis.

In September 2009, Markell and President Judge James Vaughn announced the establishment of a Foreclosure Mediation Program, which allows homeowners to participate in a court mediation process with their lender to find a mutually agreeable alternative to foreclosure.

In June 2009, the Attorney General’s Mortgage Fraud Task Force was formed. The Task Force, in conjunction with the Delaware State Housing Authority, Office of the State Bank Commissioner, directs homeowners to Delaware’s HUD-certified housing counselor, links homeowners with Delaware’s Mortgage Assistance Program (DEMAP) and other government services that provide mortgage assistance, and takes aggressive law enforcement action against foreclosure scams.

Task Force partners sponsor free monthly housing workshops statewide to assist homeowners in need. A complete list of state housing events is posted online at http://www.deforeclosurehelp.org.

Free mortgage modification services are available to Delaware homeowners through Delaware’s HUD-approved housing counseling agencies. Homeowners who are worried about missing a mortgage payment, are facing foreclosure, or who suspect a foreclosure scam are encouraged to call the Attorney General’s Mortgage Hotline at 1-800-220-5424. The Hotline provides referral services to housing services, the mortgage mediation program, and initiates housing fraud complaints.
Additional information is available at http://www.deforeclosurehelp.org or http://www.attorneygeneral.delaware.gov/mortgageforeclosure.