I read all over the internet about the new MARS rules, that wont be enforced to agents in good standing with their local boards.

This is a great news for us, before MARS required us to make several disclosures and we were not allow to collect any retainer fees.

The new rules:

Real estate agents who are in good standing under state licensing requirements, in compliance with state real estate laws, and assisting homeowners in obtaining short sales are no longer required to provide the MARS disclosures.

These agents may also collect advance fees.

Deceptive practices and false statements will still be prohibited by the FTC.

The FTC’s stay only applies to short sales and does not affect agents providing assistance with other types of relief such as loan modifications.


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Comment by Jose A. Rivas (RDCpro,SFR, CDPE) on July 26, 2011 at 9:36pm
In my state we are allow to collect a retainer fee up front, however  it is my policy and my company's not to charge any client up front.
Comment by Bernadine Hunter on July 26, 2011 at 9:43am

According to the FTC's news release on 7/15/11 http://ftc.gov/opa/2011/07/mars.shtm, It states,

"The Federal Trade Commission today issued a statement announcing that it will forbear from enforcing most provisions of its Mortgage Assistance Relief Services (MARS) Rule against real estate brokers and their agents who assist financially distressed consumers in obtaining short sales from their lenders or servicers. As a result of the stay on enforcement, these real estate professionals will not have to make several disclosures required by the Rule that, in the context of assisting with short sales, could be misleading or confuse consumers."

The point originally made is correct about the disclosures. Check with your broker's attorney about laws in your state concerning advance fees.

Comment by Stacie A. Kramer on July 26, 2011 at 9:13am
Thanks, everyone. Very helpful.
Comment by Peter J Kim on July 25, 2011 at 8:52pm
In many states, advanced fees are still unlawful. Stacie, although you may receive an answer here, I highly recommend contacting the DOL in Ohio regarding this issue as it would be the safest way to go if you are thinking about charging advanced fees.
Comment by Ute Ferdig on July 25, 2011 at 8:49pm
I know in CA, we can't take advance fees. Even attorneys can't, which in turn has resulted in consumers having a hard time finding attorneys to handle loan modifications.
Comment by Stacie A. Kramer on July 25, 2011 at 8:45pm
Thanks, Peter. Does anyone know about Ohio law on this issue?
Comment by Peter J Kim on July 25, 2011 at 7:00pm

I received this email from the staff in the Bureau of Consumer Protection:
The FTC’s stay means that the mars rule does not prohibit real estate professionals who assist consumers in obtaining short sales from charging advance fees. However, the mars rule does not preempt state law. This, in turn, means that if a state law bars such advance fees, real estate professionals who operate in that state continue to be prohibited from charging them.
Just to clarify. Hope this helps!

Comment by Stacie A. Kramer on July 25, 2011 at 1:00pm

Yes, I read about this. This is good news! Thank you.


Comment by Ute Ferdig on July 25, 2011 at 12:10pm
Not so fast. Yes, the FTC said they would not enforce "violations" against agents doing short sales as long as they are.... I think it is important to note that the FTC still used the word "violations" and not enforcing is not the same as suspending the regulations. It's like saying, it's illegal to run the red light, but we won't give you a ticket. Just because they won't give you a ticket does not mean it's ok to run the red light. It's still illegal. Failure to comply with a regulation could be considered "negligence per se" and who is willing to put this to the test? The reality is that the government should stop imposing rules that do nothing but add confusion and uncertainty. Who knows what the ultimate fate of MARS will be now that the FTC has transferred its MARS rule making authority to the CFPB. Only time will tell, but in the meantime, I will continue to comply because I refuse to fall in the MARS trap that the FTC has created.
Comment by Bernadine Hunter on July 25, 2011 at 11:50am
This is great news for those of us actively trying to help people behind on their mortgage. I'll share this information with my office leader.


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