If you have obtained a designation as a short sale expert, provide services to individuals or brokers based upon your expertise as a short sale expert or charge specific fees for negotiating short sales, you must comply with the Federal Trade Commission’s MARS Rule. The Federal Trade Commission (“FTC”) put into effect the Mortgage Assistance Relief Services (“MARS”) Rule (“MARS Rule” or “Rule”) which became effective on January 31, 2011. It was generally understood that any real estate broker who was involved in negotiating with a lender to obtain a short sale consent on behalf of a seller would fall within the MARS Rule and therefore be required to make a series of disclosures and comply with the various requirements of the Rule.
Non-Experts Are Not Subject to the Rule
On July 15, 2011, the FTC announced that it would not enforce most of the provisions of the MARS Rule against real estate professionals who are acting in their licensed capacity while assisting sellers to obtain a short sale for their residence. The National Association of Realtors worked actively to obtain this result from the FTC. The original intent of the MARS Rule was to regulate an estimated 5,000 businesses which had been offering loan modification services to consumers. It was not originally intended for real estate brokers. Many of the entities originally targeted were “foreclosure rescue companies.” The FTC and State Attorneys General had clear evidence that consumers received very little benefit from these foreclosure rescue companies most of which charged advance fees for services of limited or no value to the consumer.
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