Updated Jul. 18, 2011
The quick background: People who give advice on short sales (called Mortgage Assistance Relief Services or MARS) have to follow the Federal Trade Commission’s rules. And Realtors who helped their clients seemed to fall under the MARS rules, even though it wasn’t intended to apply to them.
Discussions commenced. End result: Today the FTC sent out a release making it clear that real estate professionals are exempt from MARS requirements:
The stay 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 stay exempts real estate professionals who meet these requirements from the obligation to make disclosures and from the ban on collecting advance fees. These professionals, however, remain subject to the Rule’s ban on misrepresentations.
What this means for you:
The MARS Disclosure forms that VAR had previously provided for your use ARE NO LONGER REQUIRED in a short sale. Therefore, the following two forms have been removed from the VAR Standard Forms Center:
- “Mortgage Assistance Relief Services Disclosure” Consumer Specific Disclosure (VAR Form 400 MARS 1)
- “Mortgage Assistance Relief Services Disclosure” Offer of Mortgage Relief. (VAR Form 400 MARS 2)