MARS Rule – New Short Sale Disclosures for Mortgage Assistance Relief Services
If you own a home and are having trouble with the mortgage, then you probably want to know about the MARS Rule. No, it doesn’t mean to keep your space suit pressurized at all times, when in zero gravity, although I would recommend it. It also doesn’t mean don’t take glowing candy from little green men with watermelon sized heads. You don’t have to own a home on Mars either.
In November 2010, the FTC published the final Mortgage Assistance Relief Services final rule (“MARS rule”). The MARS rule is primarily directed at companies that offer loan modification services to consumers. You know, that guy that keeps sending you letters promising to reduce your monthly payment.
When a company is marketing these types of services to consumers, the MARS rule requires that the MARS provider make certain disclosures to consumers. In addition, the MARS rule bars advance fees paid to a MARS provider, prohibit certain representations, and imposes record keeping requirements. MARS providers can only receive payment if the consumer’s loan is modified by the lender. That means you no longer have to hand over a fat check to someone you barely know, who is promising that it will save you money one day (he he…excuse me …that always makes me chuckle).
The FTC has brought 40 cases against foreclosure rescue companies charging upfront fees to modify loans. According to the FTC, home owners received very little benefit for these often costly services.
The FTC said the following with respect to realtors, “The Commission concludes that an exemption for real estate agents is not necessary. Real estate agents customarily assist consumers in selling or buying homes and perform functions such as listing homes for sale, showing homes, and finding desirable homes for consumers. The Commission is aware that real estate agents may perform these functions when properties are bought or sold through a short sale transaction, but does not consider these services to be MARS.”
So the next time a “foreclosure rescue company” puts their hand out before they have actually rescued you, tell them, “Take Me to Your Leader!” Then call the FTC to put them on blast…or just AskRey.
Photo Source: NASA.com