Are you Doing Short Sales? Better Learn This First
June 6th, 2011
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MARS is circling YOU, if you perform Short Sale Services.
On January 31, 2011, the Mortgage Assistance Relief Services (MARS) final rule went into effect. The rule is primarily focused on companies who offer loan modifications to consumers, however the rule also impacts real estate licensees who represent clients involved in a short sale transaction. You may have experienced some unscrupulous people in your area taking advantage of consumers in distress sale situations, this rule was designed to protect the consumer.
The rule requires three disclosures at various stages of the short sale process. A disclosure is required if a real estate licensee is advertising as a short sale specialist or expert. This disclosure is required for advertisement in any media--print, social, video, audio, signage, billboards, any media. Another disclosure is required to the consumer before mortgage assistant services begin, for instance before a listing agent begins to assist a seller work with the seller's lender for a short sale, this disclosure would be given as soon as you are aware of the need for a short sale transaction. A third disclosure is required at the time the licensee presents the client with the lender's short sale approval letter. All disclosures have specific language required, font size is also dictated in the rule. The notices generally inform consumers, licensees are not associated with the government or the lender, no upfront fees can be charged, the consumer does not have to use your services and we have to be honest in our dealings with the consumer, AND consumers should not stop paying their mortgage.
If you are referring business to a "short sale expert", you should make sure they are aware of the rule and the disclosures. Referral arrangements may cause liability for non disclosure to pass also to the referring licensee. Last but certainly not least in the rule there are recordkeeping and other compliance requirements.
The National Association of REALTORS has and continues to work with the Federal Trade Commission to have our industry exempt from the disclosure requirement, however, at this writing our industry is still a part of the rule.
If you, or your agents are offering short sale services, download the rule and read it. You can find the rule on the Federal Trade Commission's website (http://www.ftc.gov) 16 CFR Part 322 Mortgage Assistance Relief Services; Final Rule. You might also want to check with your state trade association, some states have created forms for their member's use, and certainly NAR has tools available. As always, consult your attorney for advice in this matter.
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Whether you're interested in buying your first home, your next home, or just want to know more about home-ownership in general, I encourage you to check out a couple of great online resources: http://www.texasrealestate.com/ or https://www.har.com/. And for all of your Pearland, TX and Northern Brazoria and Galveston County real estate needs, please visit my site at: http://www.danfrankrealty.com. All of these sites offer tons of useful, real estate-related information geared specifically for Texans.
Remember, Danny Frank is a local Pearland, TX Real Estate expert! You can see my entire blog at: http://www.pearlandrealtyblog.com
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Disclaimer : The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official policy or position of the Houston Association of REALTORS®
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Comments (1)
Danny- This is great information- Thank you ! Teri Norton Keller Williams Realty Greater NW www.TeriNortonHomes.com
Posted By : Teri Norton