§ 265-B SECTION 265-B Distressed property consulting contracts
RPL § 265-B
§ 265-b. Distressed property consulting contracts.
1.Definitions. The following definitions shall apply to this section:
(a)"Homeowner" means a natural person who is the mortgagor with respect to a distressed home loan or who is in danger of losing a home for nonpayment of taxes.
(b)"Consulting contract" or "contract" means an agreement between a homeowner and a distressed property consultant under which the consultant agrees to provide consulting services.
(c)"Consulting services" means services provided by a distressed property consultant to a homeowner that the consultant represents will help to achieve any of the following:
(i)stop, enjoin, delay, void, set aside, annul, stay or postpone a foreclosure filing, a foreclosure sale or the loss of a home for nonpayment of taxes;
(ii)obtain forbearance from any servicer, beneficiary or mortgagee or relief with respect to the potential loss of the home for nonpayment of taxes;
(iii)assist the homeowner to exercise a right of reinstatement or similar right provided in the mortgage documents or any law or to refinance a distressed home loan;
(iv)obtain any extension of the period within which the homeowner may reinstate or otherwise restore his or her rights with respect to the property;
(v)obtain a waiver of an acceleration clause contained in any promissory note or contract secured by a mortgage on a property in foreclosure;
(vi)assist the homeowner to obtain a loan or advance of funds;
(vii)assist the homeowner in answering or responding to a summons and complaint, or otherwise providing information regarding the foreclosure complaint and process;
(viii)avoid or ameliorate the impairment of the homeowner's credit resulting from the commencement of a foreclosure proceeding or tax sale; or
(ix)save the homeowner's property from foreclosure or loss for non-payment of taxes.
(d)"Distressed home loan" means a home loan for which an installment payment is more than sixty days past due, or a home loan where the lender has commenced a foreclosure action. For purposes of this paragraph, a "home loan" is a loan in which the debt is incurred by the homeowner primarily for personal, family or household purposes, and the loan is secured by a mortgage or deed of trust on property upon which there is located or there is to be located a structure or structures intended principally for occupancy of from one to four families which is or will be occupied by the homeowner as the homeowner's principal dwelling.
(e)"Distressed property consultant" or "consultant" means an individual or a corporation, partnership, limited liability company or other business entity that, directly or indirectly, solicits or undertakes employment to provide consulting services to a homeowner for compensation or promise of compensation with respect to a distressed home loan or a potential loss of the home for nonpayment of taxes. A distressed property consultant does not include the following:
(f)"Property" shall mean real property located in this state improved by a one-to-four family dwelling used or occupied, or intended to be used or occupied, wholly or partly, as the home or residence of one or more persons, but shall not refer to unimproved real property upon which such dwellings are to be constructed.
(g)"Business day" shall mean any calendar day except Sunday or the public holidays as set forth in section twenty-four of the general construction law.
2.Prohibitions. A distressed property consultant is prohibited from doing the following:
(h)simulating in any manner a law enforcement officer, or a representative of any governmental agency;
(j)communicating with the homeowner or any member of his family or household with such frequency or at such unusual hours or in such a manner as can reasonably be expected to abuse or harass the homeowner;
(k)claiming, attempting, or threatening to enforce a right with knowledge or reason to know that the right does not exist;
(l)using a communication which simulates in any manner legal or judicial process or which gives the appearance of being authorized, issued or approved by a government, governmental agency, or attorney at law when it is not; or
(m)encumbering the property with a lien without any contractual or legal basis.
If any provision of this subdivision or the application thereof to any person or circumstances is held invalid, the invalidity thereof shall not affect other provisions or applications of this subdivision which can be given effect without the invalid provision or application, and to this end the provisions of this subdivision are severable.
3.Distressed property consulting contracts.
You may cancel this contract, without any penalty or obligation, at any time before midnight of (fifth business day after execution).
(Name of Distressed Property Consultant) (the "Consultant") or anyone working for the Consultant may not take any money from you or ask you for money until the Consultant has completely finished doing everything this Contract says the Consultant will do. You should consider consulting an attorney or a government-approved housing counselor before signing any legal document concerning your home. It is advisable that you find your own attorney, and not consult with an attorney recommended or provided to you by the Consultant. A list of housing counselors may be found on the website of the New York State Department of Financial Services, (enter web address) or by calling the Department of Financial Services toll-free at (enter number). The law requires that this contract contain the entire agreement between you and the Consultant. You should not rely upon any other written or oral agreement or promise." The distressed property consultant shall accurately enter the date on which the right to cancel ends.
(b)(i) The homeowner has the right to cancel, without any penalty or obligation, any contract with a distressed property consultant until midnight of the fifth business day following the day on which the distressed property consultant and the homeowner sign a consulting contract. Cancellation occurs when the homeowner, or a representative of the homeowner, either delivers written notice of cancellation in person to the address specified in the consulting contract or sends a written communication by facsimile, by United States mail or by an established commercial letter delivery service. A dated proof of facsimile delivery or proof of mailing creates a presumption that the notice of cancellation has been delivered on the date the facsimile is sent or the notice is deposited in the mail or with the delivery service. Cancellation of the contract shall release the homeowner of all obligations to pay fees or any other compensation to the distressed property consultant.
3-a. Distressed property consultant advertisements.
4.Penalties and other provisions.
5.The department of financial services shall prescribe the telephone number and web address to be included in the notice.
