FTC No Longer Enforcing Parts of MARS
The Federal Trade Commission announced on Friday that it would no longer enforce against real estate professionals most of a new rule in the Mortgage Assistance Relief Services (known as MARS). This had been a roadblock for practitioners trying to assist consumers in short-sale transactions.
“Real estate professionals will not have to make several disclosures required by the rule that, in the context of assisting with short sales, could be misleading or confuse consumers,” according to a statement by the FTC. “As more and more American home owners seek short sales, it is especially important that the rule not inadvertently discourage real estate professionals from helping consumers with these types of transactions.”
The MARS rule, which was proposed in 2009 and finalized and implemented in December 2010, targeted for-profit companies that charge high fees to consumers seeking mortgage assistance and required participants to disclose information about their services and barred companies from charging advance fees.
“After the [MARS] rule went into effect, a number of real estate professionals who help consumers with short sales raised concerns about complying with the rule,” according to an FTC statement. “These professionals pointed out that some of the required disclosures could confuse consumers or could be inaccurate in this context.”
As such, the FTC said it will no longer enforce most of the provisions of the MARS rule against real estate professionals who are completing short sale transactions. Regarding licensed real estate professionals who are also in good standing under state requirements, the FTC says they will now be exempt from the “obligation to make disclosures and from the ban on collecting advance fees.”
Source: “FTC Will Not Enforce Provisions of MARS Rule Against Real Estate Professionals Helping Consumers Obtain Short Sales,” Federal Trade Commission (July 15, 2011); “FTC Decides Not to Enforce Part of MARS,” HousingWire (July 15, 2011); “U.S. Relaxes ‘Short Sale’ Rule for Real Estate Agents,” Dow Jones Newswires (July 15, 2011)
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