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U.S. Senate Plans to Consider "Foreclosure Rescue Scam" Legislation. Its Time to Speak Up, Investors!

Jim Watkins
2 min read

Time to Speak UP!

The following information is about what the U.S. Senate is up to. If any of this becomes law, it will have a direct and severe impact on my business.
There are very good and honest investors out there and BiggerPockets has been a great place for new & seasoned investors to get together and let others know how to do things the right and honest way.

U.S. Senate Plans to Consider
“Foreclosure Rescue Scam”
  • Legislation Expected to be Introduced Soon.
  • Measure Likely to be Modeled After Minnesota Law,
  • But May Contain Additional Restrictions Harmful to Investors Nationwide

February 22, 2008 (U. S. Senate)

Wisconsin Senator Herb Kohl has announced plans to introduce legislation aimed at curbing the rise of ‘foreclosure rescue scams’ – using a model which may include restrictions that could be harmful to all real estate investors. The measure is likely to contain some or all of the following provisions:

  • Ban on leasebacks-to-owners
  • Ban on upfront foreclosure consultant fees
  • Ban on all “subject to” transactions
  • Limitations on an investor’s ability to purchase or take an equity interest in a home in default
  • Ban on all advertising related to “Saving Homes from Foreclosure”
  • Restrictions on real estate seminars, which could even apply to Real Estate Investor Association meetings

Also noteworthy – in the Minneapolis / HennepinCounty area alone, foreclosures have increased more than five-fold since the 2004 passage of the Minnesota statute.)

On behalf of real estate investors at the national level, the National Association of Responsible Home Rebuilders & Investors (NARHRI) is already tracking this legislation. NARHRI Executive Director John Grant says that NARHRI will offer alternative legislation from the Commonwealth of Virginia, which has the support of the local realtors, lenders, consumer groups, and which recently passed the House unanimously.

NARHRI expects to see intense political pressure for passage of the legislation before members of Congress leave in the fall. NARHRI indicates it will be providing updates on this effort as circumstances warrant.

This is a very serious in my opinion. It is very frustrating to know that there are legitimate, honest and good investors, mentors and teachers that will be affected in a harsh way.

Please, spread the word on this to everyone you know in the business. It is our job to protect our business. If we sit back and say nothing, there will be no voices to be heard and this could actually become law.

Thank you!

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.