FTC Will Not Enforce Provisions of MARS Rule Against Most Real Estate Agents
The Federal Trade Commission (FTC) has announced that real estate agents and brokers will not be subject to most provisions of the Mortgage Assistance Relief Services (MARS) rule. The MARS rule was first established in 2009 and applies to companies and individuals who assist consumers in obtaining approval of a short sale from their lender or loan servicer. It requires those who offer mortgage assistance relief services to disclose certain information to consumers about the services they provide, and prohibits the collection of advance fees as well as false or misleading claims.
As a result of the FTC’s decision, real estate professionals will not have to make the numerous disclosures required by the MARS rule, and are also exempt from the ban on the collection of advance fees. However, agents and brokers are still subject to the Rules’ ban on misrepresentation. Notably, the stay on enforcement applies only to real estate professionals who: 1) are licensed and in good standing under state licensing requirements; 2) comply with state laws governing the practices of real estate professionals; and 3) assist or attempt to assist consumers in obtaining short sales in the course of securing the sales of their homes. The FTC says the stay does not apply to real estate professionals who provide other types of mortgage assistance relief, such as loan modifications.
The ruling follows months of dialogue between the National Association of REALTORS® Legal Department and Federal Trade Commission, and more recently a meeting between NAR President Ron Phipps and FTC Commissioner Jon Leibowitz to discuss REALTORS’® concerns about the Rule’s required disclosures and the ambiguity and confusion they could create for consumers working with a real estate professional to assist in the sale of a distressed property.