The Mortgage Assistance Relief Services Act (MARS) is a ruling that residential real estate professionals must comply with. The MARS act was issued by the Federal Trade Commission (FTC) to protect consumers and took effect on January 31, 2011.
Whether you are a Realtors or not, you must understand and obey the MARS Rule whenever you approach homeowners in distress or else you will risk heavy fines being levied against us. If you violate the MARS act, you could face fines up to $11,000 dollars per occurrence and $11,000 for each day that you are not in compliance. Has MARS your attention now?
MARS was mainly meant to prevent people from taking up-front fees to negotiate with homeowners’ mortgage lenders to get loan modifications, short sales, or other relief from foreclosure. There has been numerous scammers who have often claimed to be affiliated with a government agency or government housing assistance programs visite site .
The easiest way to comply with the regulations is to know what we can and can’t do in negotiations. Even if we outsource our short sale or loan mod negotiations to a third-party company, we fall under FTC jurisdiction regarding MARS and must obey these rules. The main thing to know is that we can’t charge up-front fees. Now be sure to have your real estate attorneys verify these but here’s the breakdown of the rules as given by the FTC website:
MARS Advance Fee Ban
A person may not collect any fees until after they have provided homeowners with a written offer from their lender or servicer that they decide is acceptable and a written document from the lender or servicer describing the key changes to the mortgage that would result if they accept the offer. We must also remind consumers of their right to reject the offer without any charge. The easiest thing to do is to do not charge advance fees. One should only be paid upon satisfactory resolution of the problem