The FTC released their final Mortgage Assistance Relief Services (MARS) ruling in December of 2010. Recently there has been much discussion about it and how it affects real estate investors. It appears that it really only affects you if you work with homeowners facing the prospect of foreclosure or you attempt to work on their behalf for a short sale, loan modification, forbearance, or any other strategy aimed at mortgage relief.
From what I can tell, the only affect seems to be that you need to include additional disclosures both in your marketing to general audiences, and more specific disclosures to the actual homeowner with whom you assist. You also can not collect upfront fees or require payment for services that have not been completed.
My advice is that you should talk with your attorney to see exactly how this ruling will affect the way you do business in your state if you are involved with any of these strategies. The actual FTC ruling can be found at:
http://www.ftc.gov/os/fedreg/2010/december/R911003mars.pdf
It seems that every time the government issues a new law or ruling there is much brouhaha in the industry with some “experts” claiming the end of investing as we know it. I see it as simple disclosures that the homeowner should understand anyway as just good business practice. So get the facts from your attorney and comply with the ruling – that’s all.
Anyone have additional info on MARS they would like to share?
Lou Castillo
Lou,
I agree with you, for our type of investors, this is just another bump in the road – and much of what is noted in MARS we have already been doing.
Still it’s important to have a competent mentor & dream team, and be willing to keep up with these changes. There’s a stiff fine for non-compliance.
I’m also curious about how this will play out with our marketing. How effective is the yellow letter going to be when we have to include a page with the full disclosure? How effective will the post cards or the door hangers be, and is it even possible to include all of the disclosures using 12 point type?
I appreciate this post. You’ll have to keep us up-to-date.
Rodney
Rodney,
Correct me if you think I’m wrong, but you only need to include 2 simple disclosures on your marketing. Even on the yellow letter, you should be able to write that at the bottom and it not really be a big deal. It is also my understanding that you only need to include those disclosures in your marketing if you target people in pre-FC. If you are targeting geographic areas rather than specific pre-FC lists or similar type lists, I believe that you do noo need any disclosure. As always, keeping good records is a good idea.
Didn’t you write an article on MARS? You should include it here.
Lou
Carlos, if you are doing any marketing to homeowners who are in distress with their mortgage, then you need to follow the MARS rulings regardless of who you are turning the leads over to. If you talk to the homeowners directly, then you need to make sure to get the disclosures signed.
Lou