New FTC rule requires short sale disclosures by REALTORS®
Monday, February 28, 2011
The Federal Trade Commission has adopted regulations, effective immediately, that require additional disclosures by REALTORS® to sellers in all short sale transactions where the REALTOR® provides short sale negotiation services.
The Mortgage Assistance Relief Services (MARS) regulations define anyone who provides services that assist or attempt to assist a consumer in negotiating a short sale as a MARS provider. Specifically these regulations require three possible disclosures for any MARS provider:
*A disclosure in any advertising materials regarding short sale expertise or services. The language may simply be incorporated into the advertisement.
*A transactional disclosure when a real estate licensee enters into an agreement to provide short sale assistance or negotiation services, most likely a listing agreement to market and sell a short sale.
*A second transactional disclosure upon the lender's or servicer's short sale approval; this must be accompanied by an additional statement regarding the differences between the seller's current loan and the approved short sale terms.
*ORRA's class MARS Rules and Legislative Update (Thursday, April 7 from 1:00 – 4:00 pm; three CE credits) will include a 30-minute segment to review the new MARS regulations and disclosures. Florida REALTORS® attorney Margaret Grant will also be on hand to answer questions. Register online, or e-mail the ORRA Professional Development Department to reserve a seat. Cost is $30. Since this class is expected to sell out, please register early.
*ORRA will be hosting an Open Forum MARS Attorney Panel program on May 11 from 2:00 – 4:00 pm.
*Florida REALTORS® has created a MARS Information Center on its website, which includes fact sheets and disclosure forms.
*Detailed information about the regulations is available here on the NAR website (login required).