The FRFPA and what protects Florida homeowners
The Florida Foreclosure Rescue Fraud Prevention Act — codified at Florida Statute § 501.1377 — is the Florida state law specifically designed to protect homeowners from foreclosure rescue scams. It works alongside the federal MARS rule to regulate operators offering mortgage assistance services in Florida.
Understanding the FRFPA helps you identify legitimate operators and recognize predatory ones. The law sets specific requirements for foreclosure-related consulting and prohibits specific practices that predatory operators commonly use.
On this page
- What the FRFPA does
- Who the FRFPA applies to
- What the FRFPA prohibits
- The real estate broker exemption
- Your rights under the FRFPA
- Reporting violations
- Frequently asked questions
What the FRFPA does
The FRFPA regulates "foreclosure-related rescue services" — services offered to homeowners in foreclosure or facing default to help them avoid foreclosure or related consequences. The law imposes specific requirements on operators offering these services and prohibits specific predatory practices.
The Florida legislature passed the FRFPA in response to the foreclosure rescue scams that proliferated during and after the 2008 financial crisis. Like the federal MARS rule, the FRFPA's purpose is to prevent the specific patterns of homeowner harm common in foreclosure rescue schemes.
Who the FRFPA applies to
The FRFPA applies to "foreclosure-rescue consultants" — defined broadly to include people who offer foreclosure-related rescue services to homeowners. The law's reach extends to many types of operators in the mortgage assistance space.
The FRFPA contains exemptions for certain categories of operators:
Florida-licensed attorneys performing legal services within their licensed practice Federal- or state-chartered banks and credit unions and their affiliates and employees HUD-approved housing counseling agencies Florida-licensed real estate brokers performing real estate brokerage services Mortgage brokers and mortgage lenders licensed under Florida law
These exempted categories operate under their own regulatory regimes (attorney bar rules, federal banking regulation, real estate licensing law, etc.) that provide separate consumer protection.
What the FRFPA prohibits
The FRFPA prohibits specific practices in foreclosure-related rescue services:
Collecting payment before performing services. The FRFPA prohibits foreclosure-rescue consultants from collecting any compensation until the consultant has fully performed each service the consultant contracted to perform. This is the most important provision — it makes the upfront-fee model illegal for non-exempt operators.
Excessive fees. Even after services are performed, the FRFPA limits fees to amounts that aren't unconscionable. Predatory operators charging fees grossly disproportionate to services delivered violate this provision.
Misrepresentations. The FRFPA prohibits misrepresentations about the consultant's services, the consumer's situation, the consumer's rights, or the consumer's options. False or misleading claims by foreclosure-rescue consultants are prohibited.
Receiving consideration from third parties without disclosure. Some predatory operators receive kickbacks from third parties (loan modification companies, mortgage brokers, etc.) for referring distressed homeowners. The FRFPA requires disclosure of such arrangements.
Acquiring an interest in the homeowner's property. The FRFPA prohibits foreclosure-rescue consultants from acquiring an interest in the homeowner's property as part of the rescue service. This addresses the deed-transfer scam pattern.
Misrepresenting affiliation with government. False or misleading implications of government affiliation are prohibited.
Failure to provide contracts with required disclosures. Foreclosure-rescue consultants must provide written contracts containing specific FRFPA-required disclosures. Contracts without these disclosures violate the law.
The real estate broker exemption
Florida-licensed real estate brokers performing real estate brokerage services are exempt from the FRFPA's foreclosure-rescue-consultant provisions. The exemption acknowledges that real estate brokers operate under a separate regulatory regime (Florida Statute Chapter 475 and Florida Real Estate Commission rules) that provides its own consumer protection.
This exemption is what allows Recourse to operate as a Florida short sale practice. Our work is real estate brokerage work — listing properties, finding buyers, negotiating with lenders, closing transactions. We're regulated as a Florida real estate brokerage under our brokerage license (Blue Mar Real Estate Group, Inc., License #CQ1018554), supervised by the Florida Real Estate Commission, and subject to Florida real estate licensing law, FREC rules, and the brokerage's professional liability framework.
The exemption has limits. A licensed real estate broker offering foreclosure rescue services outside of real estate brokerage — for example, charging fees for loan modification consulting separate from listing a property — would not be exempt for those non-brokerage activities.
For Recourse's actual practice, the exemption applies cleanly. Our work is what real estate brokerage work has always been, applied to distressed property situations.
Your rights under the FRFPA
If you've engaged a foreclosure-rescue consultant in Florida, the FRFPA gives you specific rights:
Right to a written contract. The consultant must provide a written contract before any work begins. The contract must contain specific FRFPA-required disclosures.
Right to cancel. You have a five-business-day right to cancel the contract after signing, with full refund of any money paid.
Right to receive services before paying. The consultant cannot collect payment until they've performed each service they contracted to perform.
Right to communicate with your lender and attorneys. The consultant cannot prevent or discourage you from communicating directly with your lender, attorney, or anyone else.
Right to sue for violations. Violations of the FRFPA can give rise to private legal claims. You may have civil claims for return of money paid, damages, attorney fees, and other relief if you've been victimized by an FRFPA-violating operator.
Right to file complaints with state authorities. The Florida Attorney General and Florida Office of Financial Regulation accept complaints about FRFPA violations.
Reporting violations
If you've encountered an operator violating the FRFPA, several reporting channels exist:
Florida Attorney General Consumer Protection. File a complaint
Florida Office of Financial Regulation. File a consumer complaint
Florida Department of Business and Professional Regulation. If the operator claims to be a licensed real estate broker or other licensed professional, complaints about license-related violations can be filed with the relevant licensing board. File a complaint
Consumer Financial Protection Bureau. Federal-level complaints can be filed for cross-jurisdictional patterns. File a CFPB complaint
Federal Trade Commission. Report fraud
Document everything — communications, payments, agreements signed, names of individuals involved, dates and times of conversations. The more documentation you have, the easier the reporting and any subsequent civil action.
Frequently asked questions
Is Recourse subject to the FRFPA?
No, because of the real estate broker exemption. Recourse operates as a Florida-licensed real estate brokerage providing real estate brokerage services. We're regulated under Florida Statute Chapter 475 and FREC rules rather than under the FRFPA.
Does the FRFPA mean I can never pay anyone upfront?
Not exactly. Florida-licensed attorneys can collect retainers for foreclosure defense work because they're exempt from the FRFPA and operate under bar rules. HUD-approved housing counselors generally don't charge for their services. The FRFPA prohibition on upfront fees applies primarily to non-exempt foreclosure-rescue consultants.
What if a foreclosure rescue operator says they're "registered" with the state?
Foreclosure-rescue consultants aren't required to register or be licensed in Florida the way real estate brokers, attorneys, or mortgage brokers are. If an operator claims state "registration" specifically to imply legitimacy, that may be a misrepresentation. Verify with the relevant state agency.
What if I already paid an upfront fee to a foreclosure rescue operator?
You may have a civil claim against them for FRFPA violations. You may also have claims under federal MARS regulations. Consult a Florida-licensed attorney. The Florida Bar Lawyer Referral Service can help you find one.
Can a foreclosure-rescue consultant take my deed in lieu of payment?
No. The FRFPA prohibits foreclosure-rescue consultants from acquiring an interest in the homeowner's property as part of the rescue service. This addresses one of the most damaging foreclosure rescue scam patterns.
Is the FRFPA different from the MARS rule?
Yes. They're separate laws — the MARS rule is federal (12 CFR Part 1015), and the FRFPA is Florida state law (Fla. Stat. § 501.1377). They have similar purposes and similar prohibitions, but they're distinct legal frameworks. Some practices violate both; some violate only one. The FRFPA also has Florida-specific provisions that don't exist in the federal MARS rule.
Does the FRFPA cover lenders modifying their own loans?
No. The FRFPA doesn't regulate the lender's actions on the lender's own loans. The lender's loss mitigation processes are governed by federal banking regulation, state mortgage servicing law, and the lender's contracts with you — but not by the FRFPA.
Need to find an attorney about a potential FRFPA violation?
Find a Florida foreclosure attorney →
Or contact:
- Florida Bar Lawyer Referral Service
- Florida Legal Aid (free help if you qualify by income)
Related resources
- The MARS rule
- Finding a Florida foreclosure attorney
- What is a Florida short sale?
- The Florida foreclosure process
- HUD-Approved Housing Counselors (Free)
Recourse is a short sale service of Blue Mar Real Estate Group, Inc., a Florida-licensed real estate brokerage. We operate under the FRFPA's real estate broker exemption. This page is informational. It is not legal advice. For specific FRFPA-related questions or potential violations, consult a Florida-licensed attorney.
Blue Mar Real Estate Group, Inc. | Licensed Florida Real Estate Broker | License #CQ1018554. Equal Housing Opportunity.
Equal Housing Opportunity. We are not attorneys and do not provide legal advice. Modifications are decided by your servicer based on investor guidelines and your specific financial situation. We cannot guarantee any particular outcome.
Blue Mar Real Estate Group, Inc. | Licensed Florida Real Estate Brokerage License | License #CQ1018554.