MARS short sale disclosure rules canceled for Realtors

WASHINGTON – July 16, 2011 – In a move the National Association of Realtors® calls “a substantial victory for Realtors,” the Federal Trade Commission (FTC) announced that it will not enforce most of the provisions of the Mortgage Assistance Relief Services (MARS) rule against real estate licensees.

As a result of the stay on enforcement, real estate licensees who provide short sale services will not have to make the disclosures required by MARS as far as the FTC is concerned. However, the FTC announcement also gave Florida Attorney General Pam Bondi the ability to overrule the FTC within the State of Florida.

Florida Realtors has contacted Bondi’s office, but an official answer isn’t expected before next week at the earliest. In the meantime, Florida Realtors Law and Policy department recommends that Realtors continue to use the MARS disclosures until further notice.

The FTC stay on MARS rules enforcement applies only to real estate licensees and defines them as ones who: 1) are licensed and in good standing under state licensing requirements; 2) comply with state laws governing the practices of real estate professionals; and 3) assist or attempt to assist consumers in obtaining short sales in the course of securing the sale of their homes.

The stay does not apply to real estate licensees who provide other types of mortgage assistance relief services, such as loan modifications. It also does not give real estate licensees permission to use any unfair or deceptive practices banned under MARS.

NAR has been working with the FTC for several months to minimize the potential impact on real estate professionals who help financially distressed clients obtain short sales.

The complete FTC decision is available online in PDF format

Reprinted with permission. Florida Realtors®. All rights reserved.