this new ruling will be beneficial to Homeowners because the Realtors will not be overloaded with the paperwork needed and will be there to help with getting the short sale DONE! At the end of the day that is what BOTH parties want.
FTC Will Not Enforce Provisions of MARS Rule Against Real Estate Professionals Helping Consumers Obtain Short Sales
The NATIONAL ASSOCIATION OF REALTORS® (NAR) has made an important step in resolving the confusion caused by the Federal Trade Commission’s (FTC) Mortgage Assistance Relief Services Rule (MARS) among real estate professionals who provide assistance to struggling homeowners in negotiating short sales with servicers on the sale of the home.
On July 7, 2011, NAR President Ron Phipps met with FTC Chairman Jon Leibowitz to discuss the problems caused by MARS. On July 15, 2011, the FTC announced that it will forbear from enforcing most provisions of its MARS Rule against real estate professionals who assist consumers in obtaining short sales from their lenders or servicers.
Effective immediately, real estate professionals acting in their licensed capacity will no longer need to comply with most of the Rule’s requirements, including the required disclosures, advance fee ban, and recordkeeping requirements.
This forbearance of enforcement will only apply to real estate brokers (and real estate agents under their direction and control) who are:
- Licensed and maintain good standing pursuant to any applicable state law requirements
- In compliance with state laws governing the practices of real estate professionals
- Assisting or attempting to assist a consumer in negotiating, obtaining or arranging a short sale of a dwelling in the course of securing the sale of the consumer’s home.
The FTC will still enforce the Rule’s prohibition against misrepresentations made by a real estate professional while assisting a consumer in negotiating or obtaining a short sale.
The FTC’s forbearance should have the effect of resolving this issue for real estate professionals who are acting in their licensed capacity. While the Consumer Financial Protection Bureau and state attorney generals can still enforce the Rule as written, both groups are expected to follow the FTC’s lead. NAR will continue to work on obtaining a complete resolution of this issue.
For additional information on the MARS Rule click here.
For the FTC statement on the MARS Rule click here.