DE SB42

Extends foreclosure fraud protections under the Mortgage Rescue Fraud Protection Act to homeowners with mortgages 60 days in default, rather than only after foreclosure proceedings are filed.

Creates a new registration requirement for mortgage loan modification service providers operating in Delaware, with an initial $1,000 registration fee and $500 annual renewal fee deposited into the State Consumer Protection Fund to support foreclosure relief programs.

Requires written contracts for mortgage modification services to be provided to homeowners at least 24 hours before signing, printed in at least 12-point type, with cancellation rights and no advance fees allowed.

Mandates that all commercial communications by mortgage modification providers include three specific disclosures: that the company is not government-affiliated, the lender may not agree to modify the loan, and the homeowner can stop services at any time without payment obligation if the lender rejects the offer.

Prohibits mortgage modification providers from misrepresenting affiliation with government, from advising homeowners not to contact their lenders, and from collecting fees until a written modification agreement is executed between the homeowner and lender; authorizes Attorney General enforcement with civil penalties up to $10,000 per violation, or $20,000 per violation if involving elderly or disabled persons.