Homeowners Get More Protections Under New Law

Unfortunately, Indiana has one of the highest home foreclosure rates in the country. Many families have fallen on hard times and the loss of the home due to an unexpected event such as a family illness or unemployment can be devastating. To make matters worse, there are people out their who prey on families that are simply doing all they can to save their homes from foreclosure.

If you are in danger of losing your home, you may have been tempted to respond to advertisements claiming “We Buy Homes”. Although these offers may seem like a tempting way to avoid foreclosure, they may end badly for the homeowners.

The offers are led by “Foreclosure consultants” who target homeowners who have been threatened with foreclosure. Homeowners pay foreclosure consultants with hopes that the foreclosure consultant can stop or delay foreclosure. In reality, the mortgages are not paid by the company and the original homeowner ends up losing the home in spite of the fees paid to the company.

In order to better regulate “foreclosure consultants’ the Indiana Attorney General’s Office, supported a change in state law which provides homeowners with more protections when facing foreclosure.

These new changes in state law empower the homeowner and place disclosure requirements on companies that engage in these types of activities. The law now:

• Requires various written disclosures to inform homeowners about significant aspects of the service they are purchasing
• Provides a 3-day right to cancel
• Prohibits a company/individual from obtaining power of attorney from the homeowner. In some cases, homeowners were unknowingly appointing the foreclosure consultant to act on the homeowners behalf.
• Requires foreclosures consultants to obtain a surety bond of at least $25,000

The legislation makes it clear that a violation also constitutes a deceptive act under the Deceptive Consumer Sales Act, which allows the attorney general to seek remedies including injunction, restitution, and reimbursement of the attorney general’s cost.

If you or a loved one is facing foreclosure, seek help from a reputable organization with a proven track record of success. Before you enter into any agreements with a foreclosure consultant, carefully read and understand all paperwork you’re signing.