SB 1015 protects NC homeowners from a range of predatory practices. The law addresses three main issues: foreclosure rescue scams, abusive lease-option contracts, and abusive contract for deed/land installment sales.
Foreclosure Rescue Scams
The law cracks down on foreclosure rescue scams where the scammer takes title to the property without taking any responsibility for the mortgage. The law requires that if the homeowner is in foreclosure, the title to the property is transferred to someone else, representations are made that the transaction will save the home from foreclosure, and the homeowner retains some interest in the property (tenancy, etc.), then the person the property is transferred to has to pay at least 50% of the fair market value of the home. There is an exemption for depositories (including credit unions) and their subsidiaries and affiliates, as well as for immediate family members and state and local governments.
For lease-option contracts, the law requires that the contracts be executed at the same time. In many cases, the lease is executed after the option payment is made, and the lease shows a much higher rent than initially discussed or has other terms unfavorable to the borrower. The law gives the borrower the right to cure a late payment once in a twelve-month period, requires that the option contract be recorded, and restates that landlord-tenant law applies in these agreements.
Land Installment Contracts
For deed/land installment sales, the law provides a right to cure once in a twelve-month period, requires a statement of accounts, and requires that the seller have title to the property, that any loans on the property be disclosed before the contract is signed, and that no encumbrances are entered into after signing.