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New FTC rule affects real estate advertising – Are you in compliance?

On Jan. 31, a new Federal Trade Commission rule took effect, aimed at protecting financially distressed homeowners who use so-called mortgage assistance relief services, aka “MARS”. According to the FTC website, the MARS Rule protects distressed homeowners from mortgage relief scams that have sprung up during the mortgage crisis. Bogus operations falsely claim that, for a fee, they will negotiate with the consumer’s mortgage lender or servicer to obtain a loan modification, a short sale, or other relief from foreclosure. The MARS Rule requires a specific disclosure in all advertising for mortgage assistance relief services, which includes short sales. The clear and prominent advertising disclosure must state:

IMPORTANT NOTICE (in two-point type larger than the font size of the disclosure): (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 the broker represents that the seller should stop making payments add: “If you stop paying your mortgage, you could lose your home and damage your credit rating.”]

Need more info? Check out the info on the Arizona Association of Realtors website: http://www.aaronline.com/azr/2011/march/mars-rule-requirements-for-short-sale-brokers.aspx.