2945. Legislative findings and declarations; Intent and purposes of article
(a) The Legislature finds and declares that homeowners whose residences are in foreclosure are subject to fraud, deception, harassment, and unfair dealing by foreclosure consultants from the time a Notice of Default is recorded pursuant to Section 2924 until the time of the foreclosure sale. Foreclosure consultants represent that they can assist homeowners who have defaulted on obligations secured by their residences. These foreclosure consultants, however, often charge high fees, the payment of which is often secured by a deed of trust on the residence to be saved, and perform no service or essentially a worthless service. Homeowners, relying on the foreclosure consultants' promises of help, take no other action, are diverted from lawful businesses which could render beneficial services, and often lose their homes, sometimes to the foreclosure consultants who purchase homes at a fraction of their value before the sale.
(b) The Legislature further finds and declares that foreclosure consultants have a significant impact on the economy of this state and on the welfare of its citizens.
(c) The intent and purposes of this article are the following:
(1) To require that foreclosure consultant service agreements be expressed in writing; to safeguard the public against deceit and financial hardship; to permit rescission of foreclosure consultation contracts; to prohibit representations that tend to mislead; and to encourage fair dealing in the rendition of foreclosure services.
(2) The provisions of this article shall be liberally construed to effectuate this intent and to achieve these purposes.
The following definitions apply to this chapter:
(a) "Foreclosure consultant" means any person who makes any solicitation, representation, or offer to any owner to perform for compensation or who, for compensation, performs any service which the person in any manner represents will in any manner do any of the following:
(1) Stop or postpone the foreclosure sale.
(2) Obtain any forbearance from any beneficiary or mortgagee.
(3) Assist the owner to exercise the right of reinstatement provided in Section 2924c.
(4) Obtain any extension of the period within which the owner may reinstate his or her obligation.
(5) Obtain any waiver of an acceleration clause contained in any promissory note or contract secured by a deed of trust or mortgage on a residence in foreclosure or contained in any such deed of trust or mortgage.
(6) Assist the owner to obtain a loan or advance of funds.
(7) Avoid or ameliorate the impairment of the owner's credit resulting from the recording of a notice of default or the conduct of a foreclosure sale.
(8) Save the owner's residence from foreclosure.
(b) A foreclosure consultant does not include any of the following:
[We do not reproduce the exceptions, which include a variety of licensed professionals, including lawyers, and the lienholder itself.]
(c) "Person" means any individual, partnership, corporation, limited liability company, association or other group, however organized.
(d) "Service" means and includes, but is not limited to, any of the following:
(1) Debt, budget, or financial counseling of any type.
(2) Receiving money for the purpose of distributing it to creditors in payment or partial payment of any obligation secured by a lien on a residence in foreclosure.
(3) Contacting creditors on behalf of an owner of a residence in foreclosure.
(4) Arranging or attempting to arrange for an extension of the period within which the owner of a residence in foreclosure may cure his or her default and reinstate his or her obligation pursuant to Section 2924c.
(5) Arranging or attempting to arrange for any delay or postponement of the time of sale of the residence in foreclosure.
(6) Advising the filing of any document or assisting in any manner in the preparation of any document for filing with any bankruptcy court.
(7) Giving any advice, explanation or instruction to an owner of a residence in foreclosure which in any manner relates to the cure of a default in or the reinstatement of an obligation secured by a lien on the residence in foreclosure, the full satisfaction of that obligation, or the postponement or avoidance of a sale of a residence in foreclosure pursuant to a power of sale contained in any deed of trust.
(e) "Residence in foreclosure" means a residence in foreclosure as defined in Section 1695.1.
(f) "Owner" means a property owner as defined in Section 1695.1.
(g) "Contract" means any agreement, or any term thereof, between a foreclosure consultant and an owner for the rendition of any service as defined in subdivision (d).