2015 Delaware Code
Title 6 - Commerce and Trade
CHAPTER 24B. FORECLOSURE CONSULTANTS AND RECONVEYANCES
Subchapter III Foreclosure Reconveyances
§ 2425B Prohibited acts.

A foreclosure purchaser may not:

(1) Enter into, or attempt to enter into, a foreclosure reconveyance with a homeowner unless:

a. The foreclosure purchaser verifies and can demonstrate that the homeowner has or will have a reasonable ability to pay for the subsequent reconveyance of the property back to the homeowner on completion of the terms of a foreclosure reconveyance, or, if the foreclosure reconveyance provides for a lease with an option to repurchase the property, the homeowner has or will have a reasonable ability to make the lease payments and repurchase the property within the term of the option to repurchase;

b. The foreclosure purchaser and the homeowner complete a settlement before any transfer of an interest in the property is effected; and

c. The foreclosure purchaser complies with the requirements of the federal Home Ownership Equity Protection Act, 15 U.S.C. § 1639, and its implementing regulations for any foreclosure reconveyance in which the homeowner obtains a vendee interest in a contract for deed;

(2) Fail to:

a. Ensure that the title to the property has been reconveyed to the homeowner in a timely manner if this subchapter or the terms of a foreclosure reconveyance agreement require a reconveyance; or

b. Make payment to the homeowner within 90 days of any resale of the property so that the homeowner receives cash payments or consideration in an amount equal to at least 82% of the net proceeds from any resale of the property should a property subject to a foreclosure reconveyance be sold within 18 months after entering into a foreclosure reconveyance agreement;

(3) Enter into repurchase or lease terms as part of the foreclosure conveyance that are unfair or commercially unreasonable, or engage in any other unfair conduct;

(4) Represent, directly or indirectly, that:

a. The foreclosure purchaser is acting as an advisor or a consultant, or in any other manner represent that the foreclosure purchaser is acting on behalf of the homeowner;

b. The foreclosure purchaser has certification or licensure that the foreclosure purchaser does not have; or

c. The foreclosure purchaser is assisting the homeowner to "save the house" or use a substantially similar phrase;

(5) Make any other statements, directly or by implication, or engage in any other conduct that is false, deceptive, or misleading, or that has the likelihood to cause confusion or misunderstanding, including statements regarding:

a. The value of the residence in foreclosure;

b. The amount of proceeds the homeowner will receive after a foreclosure sale;

c. Any contract term; or

d. The homeowner's rights or obligations incident to, or arising out of, the foreclosure reconveyance; or

(6) Until the homeowner's right to cancel the transaction has expired:

a. Record any document, including an instrument of conveyance, signed by the homeowner; or

b. Transfer or encumber or purport to transfer or encumber any interest in the residence in foreclosure to any third party.

76 Del. Laws, c. 419, § 1.;

§ 2426B Presumptions, accounting, bona fide purchaser.

(a) For the purposes of § 2425B(1)a. of this title, there is a rebuttable presumption that:

(1) A homeowner has a reasonable ability to pay for a subsequent reconveyance of the property if the homeowner's payments for primary housing expenses and regular principal and interest payments on other personal debt, on a monthly basis, do not exceed 60% of the homeowner's monthly gross income; and

(2) The foreclosure purchaser has not verified reasonable payment ability if the foreclosure purchaser has not obtained documents other than a statement by the homeowner of assets, liabilities, and income.

(b) The foreclosure purchaser shall make a detailed accounting of the basis for the amount of a payment made to the homeowner of a property resold within 18 months after entering into a foreclosure reconveyance agreement in accordance with § 2425B(2)b. of this title. The accounting shall include documentation of expenses and other consideration paid by the foreclosure purchaser and deducted from the resale price.

(c) A bona fide purchaser for value or bona fide lender for value who enters into a transaction with a homeowner or a foreclosure purchaser when a foreclosure consulting contract is in effect or during the period when a foreclosure reconveyance may be canceled, without notice of those facts, receives good title to the property, free and clear of the right of the parties to the foreclosure consulting contract or the right of the homeowner to rescind the foreclosure reconveyance.

(d) This subchapter may not be construed to impose any duty on a purchaser, title insurer, or title insurance producer with respect to the application of the proceeds of a sale of property by a foreclosure purchaser.

76 Del. Laws, c. 419, § 1.;