Mortgage Assistance Relief Services (MARS)
The Federal Trade Commission (FTC) has issued rules that affect individuals and businesses that offer Mortgage
Assistance Relief Services (MARS) to clients. Basically, these rules cover anyone – including real estate brokers
and agents - who negotiate short sales for their clients.
Although the rules technically apply to real estate professionals, many of the provisions in the rules simply do not
make sense in the context of a real estate transaction. NAR sought some sort of real estate exemption in the
original rules, and has continued to work for clarifications or changes now that the rules have been issued.
NAR staff has been in close contact with the FTC, which has indicated that substantial rules changes are likely in
the coming months. At the 2011 Midyear meetings, NAR legal staff informed attendees that FTC officials have
told them that Realtors® who do not use certain disclaimers or disclosures required by the rules will not be
prosecuted, as those requirements will be mostly eliminated with the anticipated changes.
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Until those changes officially occur, however, members may feel more comfortable following the rules as
written, rather than relying on the assurances of future changes. Further, some lenders or other third parties
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involved in short sales may be requiring use of the disclosures, so you may need to use them to fulfill those
responsibilities.
This document will provide information on the major requirements of the rules, how/when they apply. A more
thorough explanation by NAR is on the NAR website, which also has links to the rules themselves.
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(1) No Up-front Fees
The rules prohibit MARS providers from accepting any up-front fees from consumers who are likely going to be
pursuing a short sale. If your brokerage policy includes advance fees from sellers, you should be sure that you do
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not charge those fees to sellers who are likely candidates for short sales. This rule is not likely to be altered by
the potential regulatory changes.
(2) General Advertising Disclosure
*** The disclosure in this section should be used by all Realtors® whose activities are covered by the
rules – this section is not expected to be altered by any impending changes. ***
Any entity that specifically markets MARS to consumers must make certain general disclosures in all
advertisements promoting its MARS services. Any brokerage that specifically solicits short sale sellers or
promotes its short sale expertise will need to include these disclosures in all of its advertisements, including
telephone solicitations. That disclosure is as follows:
IMPORTANT NOTICE:
______________________________ (Name of Company) is not associated with the
government, and our service is not approved by the government or your lender. Even if you
accept this offer and use our service, your lender may not agree to change your loan. If you
stop paying your mortgage, you could lose your home and damage your credit rating.
This need for this disclosure is judged on a case-by-case basis. For the most part, if you are advertising as a
“short sale specialist” or using other language indicating that you’re specifically targeting short sale sellers, you’d
need to use the disclosure. Simply having the “SFR” designation on your business card, or a general article about
short sales on your website probably doesn’t trigger the requirement. Disclosures should be made in any
advertising or solicitation that qualifies under these rules, including print, electronic or telephone solicitations,
and there are additional disclosures that must be made in oral solicitations (radio, TV, telephone, etc.).
(3) Consumer-specific Disclosure
Once you are discussing possible representation of a consumer known to be in a short sale situation, the rules
state that you must provide a consumer-specific disclosure. That disclosure language is provided below in the
MARS Consumer Disclosure form. These disclosures are to be given in every communication prior to finalizing
your representation.
The FTC has advised NAR legal staff that expected changes to the rules will eliminate the need for real estate
licensees to provide these disclosures in the future. Further, FTC staff has indicated that they do not intend to
prosecute real estate licensees who do not provide the disclosures under the current rules.
You may still wish to use the disclosures as a risk reduction measure, or you may be required to use them if you
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are working with a third party that requires their use, such as a lender who expects the disclosures to be used, or
if you are working with a non-licensee negotiator who needs to use the disclosures. PAR has provided the
language in a format that will facilitate providing the language to the consumer and maintaining a copy of the
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acknowledged disclosure for your files.
The amount to be filled in the blank is the amount you are charging the seller for the negotiation services. In
most cases you are likely to be providing these services as part of your overall listing fee and not charging an
itemized fee for your short sale negotiations with the lender. If that is the case, you can fill in “$0” for that
blank.
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(4) Disclosures When Providing an Offer of Mortgage Relief to a Consumer
The third disclosure is one to be given at the time you deliver an offer of mortgage relief to a seller. This
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disclosure must be provided at the same time the lender’s decision is provided to the seller, on a separate piece of
paper. The language is included MARS Offer Disclosure form.
The FTC has advised NAR legal staff that expected changes to the rules will eliminate the need for real estate
licensees to provide these disclosures in the future. Further, FTC staff has indicated that they do not intend to
prosecute real estate licensees who do not provide the disclosures under the current rules.
You may still wish to use the disclosures as a risk reduction measure, or you may be required to use them if you
are working with a third party that requires their use, such as a lender who expects the disclosures to be used, or
if you are working with a non-licensee negotiator who needs to use the disclosures. PAR has provided the
language in a format that will facilitate providing the language to the consumer and maintaining a copy of the
acknowledged disclosure for your files.
The amount to be filled in the blank is the amount you are charging the seller for the negotiation services. In
most cases you are likely to be providing these services as part of your overall listing fee and not charging an
itemized fee for your short sale negotiations with the lender. If that is the case, you can fill in “$0” for that
blank.
MoRtgAge ASSiStAnCe Relief SeRviCeS MARSCD
ConSuMeR DiSCloSuRe
This form recommended and approved for, but not restricted to use by, the members of the Pennsylvania Association of Realtors® (PAR).
tHiS iS not A ContRACt
1 BRokeR (Company) ____________________________________________________________________________________
2 liCenSee(S) ___________________________________________________________________________________________
3 SelleR _______________________________________________________________________________________________
4 Federal Regulations require that certain consumer-specific disclosures be given by providers of Mortgage Assistance Relief
5 Services (MARS).
6 Mortgage Assistance Relief Service means any service, plan, or program that is offered or provided to the consumer in exchange
7 for consideration that is represented, expressly or by implication, to assist or attempt to assist a consumer with his or her mortgage,
8 including any of the following: stopping, preventing, or postponing foreclosure; negotiating, obtaining, or arranging a loan modifi-
9 cation, forbearance, short sale, deed-in-lieu or extension; obtaining any waiver of an acceleration clause or balloon payment.
10 See the full regulation at 16 CFR §322.2 for more information.
11 iMPoRtAnt notiCe
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12 You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance
13 we obtain from your lender or servicer. If you reject the offer, you do not have to pay us. If you accept the
14 offer, you will have to pay us _______________________ for our services. Broker is not associated with the
15
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government, and our service is not approved by the government or your lender. Even if you accept this offer
16 and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you
17 could lose your home and damage your credit rating.
18 this notice does not change any terms of your listing contract that apply to general real estate services not covered by the
19 ftC MARS regulations.
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20 SelleR _______________________________________________________ DAte ____________________________________
21 SelleR _______________________________________________________ DAte ____________________________________
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22 SelleR _______________________________________________________ DAte ____________________________________
23 BRokeR (Company name) ________________________________________________________________________________
24 ACCePteD on BeHAlf of BRokeR By __________________________________ DAte ____________________
CoPyRigHt PennSylvAniA ASSoCiAtion of ReAltoRS® 2011
6/11
MORtgAge ASSiStAnce Relief SeRviceS MARSOD
OffeR DiSclOSuRe
This form recommended and approved for, but not restricted to use by, the members of the Pennsylvania Association of Realtors® (PAR).
tHiS iS nOt A cOntRAct
1 BROkeR (company) ____________________________________________________________________________________
2 licenSee(S) ___________________________________________________________________________________________
3 SelleR _______________________________________________________________________________________________
4 Federal Regulations require that certain disclosures be given by providers of Mortgage Assistance Relief Services (MARS) at the
5 time an offer of mortgage relief is being presented to a consumer.
6 Mortgage Assistance Relief Service means any service, plan, or program that is offered or provided to the consumer in exchange
7 for consideration that is represented, expressly or by implication, to assist or attempt to assist a consumer with his or her mortgage,
8 including any of the following: stopping, preventing, or postponing foreclosure; negotiating, obtaining, or arranging a loan modifi-
9 cation, forbearance, short sale, deed-in-lieu or extension; obtaining any waiver of an acceleration clause or balloon payment.
10 See the full regulation at 16 CFR §322.2 for more information.
11 iMPORtAnt nOtice: Before buying this service, consider the following information
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12 This is an offer of mortgage assistance we obtained from your lender or servicer. You may accept or reject the
13 offer. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us
14 _______________________.
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15 this notice does not change any terms of your listing contract that apply to general real estate services not covered by the
16 ftc MARS regulations.
17 SelleR _______________________________________________________ DAte ____________________________________
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18 SelleR _______________________________________________________ DAte ____________________________________
19 SelleR _______________________________________________________ DAte ____________________________________
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20 BROkeR (company name) ________________________________________________________________________________
21 AccePteD On BeHAlf Of BROkeR By ___________________________________ DAte ____________________
cOPyRigHt PennSylvAniA ASSOciAtiOn Of ReAltORS® 2011
6/11