Well as if our jobs were not difficult enough as a Sacramento Short Sale Agent, now the government (Federal Trade Commission) has decided to insist yet another requirement. MARS ( Mortgage Assistance Relief Services )? I conceive that they are from MARS.
The Federal Trade Commission has decided to impose the “MARS” rule as written in November 2010. The rule has taken full effect as of January 31,2011. These new “MARS” rules (I just love that) directly effect REALTORS who negotiate short sales with lenders. REALTORS who negotiate short sales with lenders and those who promote short sale services to the public as a alternative to avoid foreclosure must comply with new disclosure requirements. According to NAR, these new rules do not apply to REALTORS who limit their Sacramento Short Sale services to customary practices such as listing homes, or selling homes. I just happen to be the lucky one who not only lists Sacramento Short Sale homes as a Sacramneto Short Sale Agent, but I also negotiate them for my clients and other agents clients.
California Association of REALTORS (C.A.R.) is working on standardizing forms to assist Sacramento Short Sale Agents comply with these disclosure requirements.Up to that point it is up to the Broker and Sacramento Short sale Agent to comply. The Disclosure requirements are generally as follows:
1.Disclose on promotional and marketing materials for general commercial communications that the company (broker) is not associated with the government (thank goodness), and that a lender may not agree to change the loan. (There’s a shocker) 2.Disclose before a specific client agrees to use an agent’s services as mentioned above, that (1) the consumer may stop doing business with the brokerage at any time, (2) the client must pay the broker’s total compensation if the client accepts the lender’s offer, and (3) the client does not have to pay the brokerage if the client rejects and does not agree with the lender’s offer. 3.Disclose when furnishing the lender’s offer (Short Sale Approval) to the client include items (2) and (3) above, and provide a notice from the lender of the material difference between the lender’s offer and the client’s current mortgage loan. This is the kicker, as this is not a part of all approval letters.
There are also some other requirements included in this new, here we go again, “MARS” rule. There are some prohibited acts included which are quite obvious, and quite honestly if there are currently in practice in your Sacrament Short Sale Agent business, run away from the business now. Here they are, refrain from requesting or receiving payment until the consumer enters into a written agreement with the lender (These are called Advance Fees, here you go Charlie,Duh). Refrain from engaging in certain deceptive acts, such as representing that a consumer should not contact a lender,misrepresenting the likelihood of obtaining a short sale,misrepresenting the time it will take to obtain approval from the lender,misrepresenting the consumer’s obligation to make mortgage payments. Oh and that is not all, we have some record retention requirements as well, and once again, should already be a part of everday business. Must keep copies of all records for 24 months (Try scanning and saving on a disk), including all consumer conversations/communication, files, contracts, marketing materials, websites, blogs, etc. etc. There is about a 50 page document on all of these new rules that can be obtained on realtor.org if you every have the need.
The Federal Trade Commission (FTC) had begun this process back in 2009 in response to some 40 cases brought before them. The cases were “foreclosure rescue services” who based on evidence, it was proven consumers received very little benefit from. We all know this was going on with al of the loan modification companies/attorneys taking upfront fees, with little or no result.None, of these 40 cases involved Sacramento Short Sale Agents, or REALTORS in general. National Association of REALTORS did submit comments and testimony during the rule making process seeking an exemption for real estate licensees. Guess what, it didn’t work.
If you would like more information on the short sale process please view my short sale blog here,Sacramento Short Sale Agent view my blog here,