John's Florida Real Estate Blog



TALLAHASSEE - Governor Charlie Crist signed into law today legislation that will enhance consumer protection for consumers seeking a mortgage.  The legislation, an "Act Relating to Mortgages," was sponsored by Senator Mike Fasano and Representative Garrett Richter at the request of the Office of Financial Regulation.  This law will help protect consumers by requiring additional disclosures, such as the risk associated with adjustable rate mortgages.  The law also provides additional enforcement and investigative tools for prosecuting perpetrators of mortgage fraud and makes it a third degree felony for violators.

The enactment of this legislation coincides with actions that are being taken by the Financial Services Commission and the Office of Financial Regulation to address lending and foreclosure issues.  The Financial Services Commission is encouraging financial institutions and other lenders to work with borrowers who are delinquent or subject to foreclosure on their homes.  The Commission is reaching out to all lenders to help make Florida an affordable and better place to live.

The Commission is concerned that the American dream of home ownership is becoming less affordable to many Floridians.  Financial institutions and lenders are being urged to make every effort prudently possible to assist Floridians in realizing their hopes and dreams of being a home owner. Alternative solutions that promote safe and sound lending practices are generally in the long-term best interest of the financial institution and the borrower.

The Office of Financial Regulation has put together a list of proposals that will hopefully allow some guidance to borrowers and lenders.   One example would be modifying loan terms, or moving the borrower from a higher adjustable rate to a lower fixed rate loan.  The Office has also created a new link available at titled, "Tips on Foreclosures and Delinquencies," that provides additional information to help borrowers and lenders alike in coping with mortgage foreclosures and delinquencies.  Borrowers who are unable to make their mortgage payment should contact their lender or servicer immediately to see what alternatives are available to them. 

The Financial Services Commission is comprised of the Governor, Charlie Crist, Attorney General, Bill McCollum, the Chief Financial Officer, Alex Sink, and the Commissioner of Agriculture, Charles Bronson.  The Office of Financial Regulation reports to the Financial Services Commission.


Notes from John Elwell - It is my understanding that this new legislation will require the following:

  1. That borrowers be informed whenever a loan's terms change, no later than 3 business days before the closing on the sale/purchase.
  2. If a lender is going to pay a fee to a mortgage broker they must inform the buyer in writing how much that payment will be.
  3. Now "Good Faith Estimates" of closing costs must be signed and dated by the borrowers when they receive them. Furthermore, they must show all fees that will be charged. In the past I have had buyers arrive at the closing table having never even seen a good faith estimate.
  4. Lenders and mortgage brokers are required to give borrowers precise disclosures concerning their loans.
  5. Now the Florida Office of Financial Regulation will be able to take action against lenders and mortgage brokers that violate either the Real Estate Settlement Procedures Act (RESPA) or the federal Truth In Lending Act.

Considering some of the fraudlent activity that has gone on in the past, this law can only benefit home buyers in Florida. At one time we were a hotbed of lending fraud. This may help curtail such behavior in the future. Let's hope so.

John Elwell - REALTOR


Bill Nye Realty, Inc.


Licensed in Florida


Comment balloon 0 commentsJohn Elwell • June 21 2007 12:22PM


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