Foreclosure Rescue Laws
California’s Mortgage Foreclosure Consultant Act was enacted to provide relief for homeowners facing foreclosure, recognizing that they are particularly vulnerable to foreclosure rescue scams. The Act allows a homeowner to cancel any service that they contracted for with a foreclosure consultant within three days of originating the agreement. Up front fees are prohibited, and any fee can only be collected after services are rendered. Generally, this Act excludes attorneys from being defined as foreclosure consultants. The Act does define a foreclosure consultant as any person who offers to perform any of the following services:
- Postpone or stop the foreclosure sale.
- Obtain a forbearance.
- Assist the owner with exercising the right of reinstatement.
- Obtain any extension of the reinstatement period.
- Obtain any waiver of an acceleration clause found in a promissory note or contract.
- Assist the owner with a loan or advance of funds.
- Fix the homeowner’s credit due to any damage caused by the recording of a notice of default or a foreclosure sale.
- Save a residence from foreclosure.
- Assist the owner in obtaining any remaining proceeds from the foreclosure sale of the residence.
The complete letter of the law can be studied by reading California’s Civil Code Section 2945-2945.11.
