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S1431aa..............................................by JUDICIARY AND RULES
FORECLOSURES - Adds to and amends existing law relating to liens and
foreclosures to provide legislative findings; to provide for certain
contracts in writing; to provide for notice relating to mortgage
foreclosure; to provide for right of contract rescission; to provide for
exclusions; and to provide penalties.
02/14 Senate intro - 1st rdg - to printing
02/15 Rpt prt - to Jud
02/19 Ref'd to Com/HuRes
02/20 Rpt out - to 14th Ord
02/21 Rpt out amen - to engros
02/22 Rpt engros - 1st rdg - to 2nd rdg as amen
02/25 2nd rdg - to 3rd rdg as amen
02/26 3rd rdg as amen - PASSED - 34-0-1
AYES -- Andreason, Bair, Bastian, Bilyeu, Broadsword, Burkett,
Cameron, Coiner, Corder, Darrington, Davis, Fulcher, Gannon, Geddes,
Goedde, Hammond, Heinrich, Hill, Kelly, Keough, Langhorst, Little,
Lodge, Malepeai(Sagness), McGee, McKague, McKenzie, Pearce,
Richardson Schroeder, Siddoway, Stegner, Stennett, Werk
NAYS -- None
Absent and excused -- Jorgenson
Floor Sponsor - Werk
Title apvd - to House
02/27 House intro - 1st rdg - to Jud
03/11 Rpt out - rec d/p - to 2nd rdg
03/12 2nd rdg - to 3rd rdg
03/13 3rd rdg - PASSED - 65-0-5
AYES -- Anderson, Andrus, Barrett, Bayer, Bedke, Bell, Black, Block,
Bock, Boe, Bolz, Bowers, Brackett, Bradford, Chadderdon, Chavez,
Chew, Collins, Crane, Durst, Eskridge, Hagedorn, Hart, Harwood,
Henbest, Henderson, Jaquet, Killen, King, Kren, Labrador, Lake,
LeFavour, Loertscher, Luker, Marriott, Mathews, McGeachin, Mortimer,
Moyle, Nielsen, Pasley-Stuart, Pence, Raybould, Ringo, Roberts,
Ruchti, Rusche, Sayler, Shepherd(02), Shepherd(08), Shirley, Shively,
Smith(30), Smith(24), Snodgrass, Stevenson, Thayn, Thomas, Trail,
Vander Woude, Wills, Wood(27), Wood(35), Mr. Speaker
NAYS -- None
Absent and excused -- Bilbao, Clark, Nonini, Patrick, Schaefer
Floor Sponsor - Killen
Title apvd - to Senate
03/14 To enrol
03/17 Rpt enrol - Pres signed - Sp signed
03/18 To Governor
03/18 Governor signed
Session Law Chapter 192
Effective: 07/01/08
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008IN THE SENATE SENATE BILL NO. 1431 BY JUDICIARY AND RULES COMMITTEE 1 AN ACT 2 RELATING TO LIENS AND FORECLOSURES; AMENDING TITLE 45, IDAHO CODE, BY THE 3 ADDITION OF A NEW CHAPTER 16, TITLE 45, IDAHO CODE, TO PROVIDE LEGISLATIVE 4 FINDINGS, TO PROVIDE FOR CERTAIN CONTRACTS IN WRITING, TO PROVIDE FOR 5 NOTICE RELATING TO MORTGAGE FORECLOSURE, TO PROVIDE FOR RIGHT OF CONTRACT 6 RESCISSION AND TO PROVIDE PENALTIES; AND AMENDING SECTION 45-1505, IDAHO 7 CODE, TO PROVIDE FOR NOTICE RELATING TO MORTGAGE FORECLOSURE. 8 Be It Enacted by the Legislature of the State of Idaho: 9 SECTION 1. That Title 45, Idaho Code, be, and the same is hereby amended 10 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap- 11 ter 16, Title 45, Idaho Code, and to read as follows: 12 CHAPTER 16 13 CONSUMER FORECLOSURE PROTECTION ACT 14 45-1601. LEGISLATIVE FINDINGS. The legislature finds that some persons 15 and businesses are engaging in patterns of conduct that defraud innocent 16 homeowners of their title, equity interest, or other value in residential 17 dwellings under the guise of stopping or postponing a foreclosure sale. The 18 legislature also finds this activity to be contrary to the public policy of 19 this state and therefore establishes notice requirements governing contracts 20 or agreements entered into during the foreclosure period. The legislature fur- 21 ther finds that the provisions of this chapter shall be construed in such a 22 manner that it does not inhibit transactions with legitimate lenders and 23 investors. 24 45-1602. CONTRACT NOTICE. (1) During the foreclosure period described in 25 section 45-1505, Idaho Code, any contract or agreement that involves the 26 transfer of any interest in property subject to foreclosure, or the transfer 27 of money in regard to property subject to foreclosure, must be in writing and 28 must be accompanied by and affixed to the following notice in twelve (12) 29 point boldface type and on a separate sheet of canary yellow or some similarly 30 colored yellow paper no smaller than eight and one-half (8 1/2) inches by 31 eleven (11) inches: 32 "NOTICE REQUIRED BY IDAHO LAW 33 Mortgage foreclosure is a legal proceeding where a lender terminates 34 a borrower's interest in property to satisfy unpaid debt secured by 35 the property. This can mean that when a homeowner gets behind on his 36 or her mortgage payments, the lender forces a sale of the home on 37 which the mortgage loan is based. Some individuals or businesses may 38 say they can "save" your home from foreclosure. You should be cau- 39 tious about such claims. It is important that you understand all the 2 1 terms of a plan to "rescue" you from mortgage foreclosure and how it 2 will affect you. It may result in your losing valuable equity that 3 you may have in your home. If possible, you should consult with an 4 attorney or financial professional to find out what other options you 5 may have. Do not delay seeking advice, because the longer you wait, 6 the fewer options you may have. 7 You may find helpful information online. One excellent source is the 8 Department of Housing and Urban Development (HUD) website which can 9 be found at "http://www.hud.gov/foreclosure/index.cfm". HUD also 10 maintains on its website a list of approved housing counselors who 11 can provide free information to assist homeowners with financial 12 problems. Another good source of information is found at the Office 13 of the Attorney General's website at "http://www2.state.id.us/ag/". 14 Under Idaho law, you have five (5) days to rescind or undo certain 15 contracts or agreements that relate to transferring interests in 16 property or money in a foreclosure situation. An attorney or finan- 17 cial professional can tell you more about this option.". 18 (2) If during the foreclosure period described in section 45-1505, Idaho 19 Code, any contract or agreement that involves the transfer of any interest in 20 property subject to foreclosure, or the transfer of money in regard to prop- 21 erty subject to foreclosure, was solicited, negotiated, or represented to the 22 consumer in the Spanish language, the written notice to be provided to the 23 consumer and set forth in this section shall be in the Spanish language on a 24 form to be prepared and made available by the office of the attorney general. 25 45-1603. RIGHT OF RESCISSION OF CONTRACT. (1) In addition to any other 26 legal right to cancel or rescind a contract, any person whose property is in 27 foreclosure as described in section 45-1505, Idaho Code, has the right to can- 28 cel or rescind any and all contracts or agreements relating to such property 29 entered into during the foreclosure period within five (5) business days of 30 entering into such contract or agreement. 31 (2) Cancellation occurs when such person gives written notice of cancel- 32 lation to all other parties to the contract. Notice of cancellation need not 33 take any particular form and, however expressed, is effective if it indicates 34 the intention not to be bound by the contract. 35 (3) Notice of cancellation, if given by mail, is effective when deposited 36 in the mail properly addressed with postage prepaid. Notice by certified mail, 37 return receipt requested, addressed to the address specified in the contract 38 or agreement, shall be conclusive proof of notice of service. 39 45-1604. PENALTIES. In addition to any other penalty provided by law, any 40 person who violates the provisions of this chapter shall be liable for penal- 41 ties and damages in accordance with chapter 6, title 48, Idaho Code. 42 SECTION 2. That Section 45-1505, Idaho Code, be, and the same is hereby 43 amended to read as follows: 44 45-1505. FORECLOSURE OF TRUST DEED, WHEN. The trustee may foreclose a 45 trust deed by advertisement and sale under this act if: 46 (1) The trust deed, any assignments of the trust deed by the trustee or 47 the beneficiary and any appointment of a successor trustee are recorded in 48 mortgage records in the counties in which the property described in the deed 3 1 is situated; and 2 (2) There is a default by the grantor or other person owing an obligation 3 the performance of which is secured by the trust deed or by their successors 4 in interest with respect to any provision in the deed which authorizes sale in 5 the event of default of such provision; and 6 (3) The trustee or beneficiary shall have (a) filed for record in the 7 office of the recorder in each county wherein the trust property, or some part 8 or parcel, is situated, a notice of default identifying the deed of trust by 9 stating the name or names of the trustor or trustors and giving the book and 10 page where the same is recorded, or a description of the trust property, and 11 containing a statement that a breach of the obligation for which the transfer 12 in trust is security has occurred, and setting forth the nature of such breach 13 and his election to sell or cause to be sold such property to satisfy such 14 obligation; and (b) mailed a copy of such notice by registered or certified 15 mail, return receipt requested, to any person requesting such notice of record 16 as provided in section 45-1511, Idaho Code. Service by mail in accordance with 17 this subsection (3) shall be deemed effective at the time of mailing. In addi- 18 tion, the trustee shall mail the notice required in this section to any indi- 19 vidual who owns an interest in property which is the subject of this section. 20 Such notice shall be accompanied by and affixed to the following notice in 21 twelve (12) point boldface type, on a separate sheet of canary yellow or some 22 similarly colored yellow paper, no smaller than eight and one-half (8 1/2) 23 inches by eleven (11) inches: 24 "NOTICE REQUIRED BY IDAHO LAW 25 Mortgage foreclosure is a legal proceeding where a lender terminates 26 a borrower's interest in property to satisfy unpaid debt secured by 27 the property. This can mean that when a homeowner gets behind on his 28 or her mortgage payments, the lender forces a sale of the home on 29 which the mortgage loan is based. Some individuals or businesses may 30 say they can "save" your home from foreclosure. You should be cau- 31 tious about such claims. It is important that you understand all the 32 terms of a plan to "rescue" you from mortgage foreclosure and how it 33 will affect you. It may result in your losing valuable equity that 34 you may have in your home. If possible, you should consult with an 35 attorney or financial professional to find out what other options you 36 may have. Do not delay seeking advice, because the longer you wait, 37 the fewer options you may have. 38 Under Idaho law, you have five (5) days to rescind or undo certain 39 contracts or agreements that relate to transferring interests in 40 property or money in a foreclosure situation. An attorney or finan- 41 cial professional can tell you more about this option.". 42 If the trust deed, or any assignments of the trust deed, are in the Span- 43 ish language, the written notice set forth in this section shall be in the 44 Spanish language on a form to be prepared and made available by the office of 45 the attorney general. 46 (4) No action, suit or proceeding has been instituted to recover the debt 47 then remaining secured by the trust deed, or any part thereof, or if such 48 action or proceeding has been instituted, the action or proceeding has been 49 dismissed.
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008Moved by Werk Seconded by Broadsword IN THE SENATE SENATE AMENDMENT TO S.B. NO. 1431 1 AMENDMENT TO SECTION 1 2 On page 1 of the printed bill, in line 25, delete "45-1505" and insert: 3 "45-1506"; and also in line 25, following "agreement" insert: "with the owner 4 or owners of record"; in line 26, following "in" insert: "residential real"; 5 and also in line 26, following "property" insert: ", as defined in section 6 45-525(5)(b), Idaho Code,"; and also in line 26, delete ", or the transfer" 7 and in line 27, delete "of money in regard to property subject to foreclo- 8 sure,". 9 On page 2, in line 18, delete "45-1505" and insert: "45-1506"; in line 19, 10 following "in" insert: "residential real"; in line 20, following "property" 11 insert: ", as defined in section 45-525(5)(b), Idaho Code,"; and also in line 12 20, delete ", or the transfer of money in regard to prop-"; and in line 21, 13 delete "erty subject to foreclosure,"; in line 30, following "agreement." 14 insert: "Neither funds nor an interest in the property shall be transferred or 15 transferable until the five (5) days have passed."; following line 38, insert: 16 "45-1604. EXCLUSIONS. The provisions of this chapter shall not apply to: 17 (1) Regulated lenders, as defined in section 28-41-301(37), Idaho Code; 18 (2) Any person licensed or chartered under the laws of any state or of 19 the United States as a bank, trust company, savings and loan association, 20 credit union, or industrial loan company. The terms "bank," "trust company," 21 "savings and loan association," "credit union" and "industrial loan company" 22 shall include affiliates or wholly-owned subsidiaries of such organizations, 23 provided that the affiliate or subsidiary is regularly examined by the char- 24 tering state or federal agency for consumer compliance purposes; 25 (3) Mortgage lenders and mortgage brokers licensed under the Idaho resi- 26 dential mortgage practices act, sections 26-3101 et seq., Idaho Code; 27 (4) Employees and agents of the organizations specified in subsections 28 (1), (2) and (3) of this section, when acting within the scope of such employ- 29 ment or agency; and 30 (5) Family member or members of the owner or owners of record of any 31 interest in residential real property subject to foreclosure. For purposes of 32 this chapter, "family member or members" means a natural person or the spouse 33 of a natural person who is related to such owner or owners of record by blood, 34 adoption or marriage within the second degree of consanguinity or a grandchild 35 or the spouse of a grandchild."; 36 and in line 39, delete "45-1604" and insert: "45-1605". 37 CORRECTION TO TITLE 38 On page 1, in line 6, following "RESCISSION" insert: ", TO PROVIDE FOR 39 EXCLUSIONS".
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-ninth Legislature Second Regular Session - 2008IN THE SENATE SENATE BILL NO. 1431, As Amended BY JUDICIARY AND RULES COMMITTEE 1 AN ACT 2 RELATING TO LIENS AND FORECLOSURES; AMENDING TITLE 45, IDAHO CODE, BY THE 3 ADDITION OF A NEW CHAPTER 16, TITLE 45, IDAHO CODE, TO PROVIDE LEGISLATIVE 4 FINDINGS, TO PROVIDE FOR CERTAIN CONTRACTS IN WRITING, TO PROVIDE FOR 5 NOTICE RELATING TO MORTGAGE FORECLOSURE, TO PROVIDE FOR RIGHT OF CONTRACT 6 RESCISSION, TO PROVIDE FOR EXCLUSIONS AND TO PROVIDE PENALTIES; AND AMEND- 7 ING SECTION 45-1505, IDAHO CODE, TO PROVIDE FOR NOTICE RELATING TO MORT- 8 GAGE FORECLOSURE. 9 Be It Enacted by the Legislature of the State of Idaho: 10 SECTION 1. That Title 45, Idaho Code, be, and the same is hereby amended 11 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap- 12 ter 16, Title 45, Idaho Code, and to read as follows: 13 CHAPTER 16 14 CONSUMER FORECLOSURE PROTECTION ACT 15 45-1601. LEGISLATIVE FINDINGS. The legislature finds that some persons 16 and businesses are engaging in patterns of conduct that defraud innocent 17 homeowners of their title, equity interest, or other value in residential 18 dwellings under the guise of stopping or postponing a foreclosure sale. The 19 legislature also finds this activity to be contrary to the public policy of 20 this state and therefore establishes notice requirements governing contracts 21 or agreements entered into during the foreclosure period. The legislature fur- 22 ther finds that the provisions of this chapter shall be construed in such a 23 manner that it does not inhibit transactions with legitimate lenders and 24 investors. 25 45-1602. CONTRACT NOTICE. (1) During the foreclosure period described in 26 section 45-1506, Idaho Code, any contract or agreement with the owner or 27 owners of record that involves the transfer of any interest in residential 28 real property, as defined in section 45-525(5)(b), Idaho Code, subject to 29 foreclosure must be in writing and must be accompanied by and affixed to the 30 following notice in twelve (12) point boldface type and on a separate sheet of 31 canary yellow or some similarly colored yellow paper no smaller than eight and 32 one-half (8 1/2) inches by eleven (11) inches: 33 "NOTICE REQUIRED BY IDAHO LAW 34 Mortgage foreclosure is a legal proceeding where a lender terminates 35 a borrower's interest in property to satisfy unpaid debt secured by 36 the property. This can mean that when a homeowner gets behind on his 37 or her mortgage payments, the lender forces a sale of the home on 38 which the mortgage loan is based. Some individuals or businesses may 39 say they can "save" your home from foreclosure. You should be cau- 2 1 tious about such claims. It is important that you understand all the 2 terms of a plan to "rescue" you from mortgage foreclosure and how it 3 will affect you. It may result in your losing valuable equity that 4 you may have in your home. If possible, you should consult with an 5 attorney or financial professional to find out what other options you 6 may have. Do not delay seeking advice, because the longer you wait, 7 the fewer options you may have. 8 You may find helpful information online. One excellent source is the 9 Department of Housing and Urban Development (HUD) website which can 10 be found at "http://www.hud.gov/foreclosure/index.cfm". HUD also 11 maintains on its website a list of approved housing counselors who 12 can provide free information to assist homeowners with financial 13 problems. Another good source of information is found at the Office 14 of the Attorney General's website at "http://www2.state.id.us/ag/". 15 Under Idaho law, you have five (5) days to rescind or undo certain 16 contracts or agreements that relate to transferring interests in 17 property or money in a foreclosure situation. An attorney or finan- 18 cial professional can tell you more about this option.". 19 (2) If during the foreclosure period described in section 45-1506, Idaho 20 Code, any contract or agreement that involves the transfer of any interest in 21 residential real property, as defined in section 45-525(5)(b), Idaho Code, was 22 solicited, negotiated, or represented to the consumer in the Spanish language, 23 the written notice to be provided to the consumer and set forth in this sec- 24 tion shall be in the Spanish language on a form to be prepared and made avail- 25 able by the office of the attorney general. 26 45-1603. RIGHT OF RESCISSION OF CONTRACT. (1) In addition to any other 27 legal right to cancel or rescind a contract, any person whose property is in 28 foreclosure as described in section 45-1505, Idaho Code, has the right to can- 29 cel or rescind any and all contracts or agreements relating to such property 30 entered into during the foreclosure period within five (5) business days of 31 entering into such contract or agreement. Neither funds nor an interest in the 32 property shall be transferred or transferable until the five (5) days have 33 passed. 34 (2) Cancellation occurs when such person gives written notice of cancel- 35 lation to all other parties to the contract. Notice of cancellation need not 36 take any particular form and, however expressed, is effective if it indicates 37 the intention not to be bound by the contract. 38 (3) Notice of cancellation, if given by mail, is effective when deposited 39 in the mail properly addressed with postage prepaid. Notice by certified mail, 40 return receipt requested, addressed to the address specified in the contract 41 or agreement, shall be conclusive proof of notice of service. 42 45-1604. EXCLUSIONS. The provisions of this chapter shall not apply to: 43 (1) Regulated lenders, as defined in section 28-41-301(37), Idaho Code; 44 (2) Any person licensed or chartered under the laws of any state or of 45 the United States as a bank, trust company, savings and loan association, 46 credit union, or industrial loan company. The terms "bank," "trust company," 47 "savings and loan association," "credit union" and "industrial loan company" 48 shall include affiliates or wholly-owned subsidiaries of such organizations, 49 provided that the affiliate or subsidiary is regularly examined by the char- 50 tering state or federal agency for consumer compliance purposes; 3 1 (3) Mortgage lenders and mortgage brokers licensed under the Idaho resi- 2 dential mortgage practices act, sections 26-3101 et seq., Idaho Code; 3 (4) Employees and agents of the organizations specified in subsections 4 (1), (2) and (3) of this section, when acting within the scope of such employ- 5 ment or agency; and 6 (5) Family member or members of the owner or owners of record of any 7 interest in residential real property subject to foreclosure. For purposes of 8 this chapter, "family member or members" means a natural person or the spouse 9 of a natural person who is related to such owner or owners of record by blood, 10 adoption or marriage within the second degree of consanguinity or a grandchild 11 or the spouse of a grandchild. 12 45-1605. PENALTIES. In addition to any other penalty provided by law, any 13 person who violates the provisions of this chapter shall be liable for penal- 14 ties and damages in accordance with chapter 6, title 48, Idaho Code. 15 SECTION 2. That Section 45-1505, Idaho Code, be, and the same is hereby 16 amended to read as follows: 17 45-1505. FORECLOSURE OF TRUST DEED, WHEN. The trustee may foreclose a 18 trust deed by advertisement and sale under this act if: 19 (1) The trust deed, any assignments of the trust deed by the trustee or 20 the beneficiary and any appointment of a successor trustee are recorded in 21 mortgage records in the counties in which the property described in the deed 22 is situated; and 23 (2) There is a default by the grantor or other person owing an obligation 24 the performance of which is secured by the trust deed or by their successors 25 in interest with respect to any provision in the deed which authorizes sale in 26 the event of default of such provision; and 27 (3) The trustee or beneficiary shall have (a) filed for record in the 28 office of the recorder in each county wherein the trust property, or some part 29 or parcel, is situated, a notice of default identifying the deed of trust by 30 stating the name or names of the trustor or trustors and giving the book and 31 page where the same is recorded, or a description of the trust property, and 32 containing a statement that a breach of the obligation for which the transfer 33 in trust is security has occurred, and setting forth the nature of such breach 34 and his election to sell or cause to be sold such property to satisfy such 35 obligation; and (b) mailed a copy of such notice by registered or certified 36 mail, return receipt requested, to any person requesting such notice of record 37 as provided in section 45-1511, Idaho Code. Service by mail in accordance with 38 this subsection (3) shall be deemed effective at the time of mailing. In addi- 39 tion, the trustee shall mail the notice required in this section to any indi- 40 vidual who owns an interest in property which is the subject of this section. 41 Such notice shall be accompanied by and affixed to the following notice in 42 twelve (12) point boldface type, on a separate sheet of canary yellow or some 43 similarly colored yellow paper, no smaller than eight and one-half (8 1/2) 44 inches by eleven (11) inches: 45 "NOTICE REQUIRED BY IDAHO LAW 46 Mortgage foreclosure is a legal proceeding where a lender terminates 47 a borrower's interest in property to satisfy unpaid debt secured by 48 the property. This can mean that when a homeowner gets behind on his 49 or her mortgage payments, the lender forces a sale of the home on 50 which the mortgage loan is based. Some individuals or businesses may 4 1 say they can "save" your home from foreclosure. You should be cau- 2 tious about such claims. It is important that you understand all the 3 terms of a plan to "rescue" you from mortgage foreclosure and how it 4 will affect you. It may result in your losing valuable equity that 5 you may have in your home. If possible, you should consult with an 6 attorney or financial professional to find out what other options you 7 may have. Do not delay seeking advice, because the longer you wait, 8 the fewer options you may have. 9 Under Idaho law, you have five (5) days to rescind or undo certain 10 contracts or agreements that relate to transferring interests in 11 property or money in a foreclosure situation. An attorney or finan- 12 cial professional can tell you more about this option.". 13 If the trust deed, or any assignments of the trust deed, are in the Span- 14 ish language, the written notice set forth in this section shall be in the 15 Spanish language on a form to be prepared and made available by the office of 16 the attorney general. 17 (4) No action, suit or proceeding has been instituted to recover the debt 18 then remaining secured by the trust deed, or any part thereof, or if such 19 action or proceeding has been instituted, the action or proceeding has been 20 dismissed.
STATEMENT OF PURPOSE
RS 17918
This legislation provides that all contracts entered into while a
residential home is in the foreclosure process must be in writing
and that consumers have a five day right of rescission. In
addition, a warning for consumers about foreclosure rescue scams
is included in foreclosure notification papers and in any written
contract.
FISCAL NOTE
None
Contact
Name: Senator Elliot Werk
Representative Bill Killen
Representative Phylis King
Phone: 332-1000
STATEMENT OF PURPOSE/FISCAL NOTE S 1431