Law Regulating Foreclosure Rescue Among Financing-Related Homeowner Protection Bills Signed By Delaware Governor

In Wilmington, Delaware, The News Journal reports:

• Gov. Ruth Anne Minner signed into law [last] Tuesday four bills aimed at helping homeowners avoid foreclosure, including a measure that for the first time licenses and regulates all loan originators. The legislation, which grew out of the recommendations of a foreclosure-prevention task force chaired by Lt. Gov. John Carney, licenses and regulates mortgage loan originators and foreclosure consultants, requires independent counseling for seniors considering reverse mortgages and raises money for a state-run fund that provides short-term loans to help homeowners make mortgage payments.

For more, see Minner OKs foreclosure prevention bills.

According to the synopsis of one of the new laws, the Mortgage Rescue Fraud Protection Act, which regulates foreclosure purchasers and foreclosure consultants:

• Each month foreclosure proceedings begin on about one house in every 1,000 nationwide. The growing foreclosure rate has led to a wave of equity stripping and foreclosure rescue scams. This bill regulates foreclosure consultants and foreclosure reconveyances in order to protect homeowners from foreclosure rescue schemes that deplete the homeowner’s equity.

Among the highlights of the law is that it makes a violation of any provision a crime punishable as a Class A misdemeanor (see section 2428B(d) of the new law).

Go here for Delaware's Mortgage Rescue Fraud Protection Act; and go here for legislative history of the new law. The law goes into effect on January 1, 2009.