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The Federal Trade Commission has a new rule directed mainly towards mortgage relief scammers but as it stands now, it is also unintentionally harming the real estate professionals who represent clients involved in short sale transactions. The FTC’s Mortgage Assistance Relief Services (MARS) rule, which is currently in effect, was created to protect distressed home owners from mortgage relief scams and ensure that people who provide counseling, advice and other services to troubled home owners are indeed providing a benefit for the fees they charge. It bans all upfront fees for renegotiating mortgage terms and mandates that certain disclosures are made to consumers if a short sale is negotiated with a lender on their behalf or when advertising short sales experience.

Currently, the rule states that real estate professionals must make certain disclosures: first in all commercial messages advertising short sale services; second before real estate professionals begin mortgage assistance services on their client’s behalf; third when they present their client with the lender’s short sale approval letter. The National Association of Realtors is working closely with the FTC to correct some of these issues, especially in the second and third disclosure area. FTC’s goal is to help make the rule more applicable to real estate brokerage.

 
 

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