CONCORD - Gov. John Lynch today signed a law aimed at protecting homeowners from foreclosure rescue scams.

“When facing the prospect of foreclosure, many people, understandably, would do anything they can to stay in their homes. Unfortunately, there are those who prey on the desperation of families struggling to keep their homes,” Gov. Lynch said. “With this law, we are acting to prevent these predators from taking advantage of New Hampshire families who are in a financial crisis.”

This new law aims to protect homeowners from losing their homes - and the valuable equity they have built into their homes - to foreclosure rescue scams. It imposes new standards on pre-foreclosure sales, requires greater disclosure from foreclosure consulting services companies and it creates stiff penalties for those who take advantage of homeowners. The penalties include fines, jail time and even repayment of equity to the homeowner.

“Here in New Hampshire, we have seen the number of foreclosures increase, which could leave more people susceptible to these scams. We must also provide better information to the public, so they can avoid finding themselves in this situation,” Gov. Lynch said. “Much of the problem can be attributed to adjustable rate mortgages that are re-setting to higher monthly payments that homeowners cannot afford. Many of these homeowners did not realize their monthly rates would increase so sharply.”

The Governor also announced the state Banking Department will soon hold a number of information sessions across the state over the next few months in an effort to better inform borrowers, and provide consumers with referrals to agencies who can assist them. The department’s examiners will review loan documents with borrowers and watch out for improper activities by mortgage originators. Informational sessions will conducted in Rochester, Manchester, Nashua, Salem, Portsmouth, Berlin, Lancaster, Lebanon, Claremont, Concord and Keene.

House Bill 365 was sponsored by Rep. Tom Donovan. Sen. David Gottesman took the lead on the bill in the state Senate.