Sacramento Short Sale Agents

Sacramento Short Sale Agent-New MARS Requirement

Well as if our jobs were not challenging enough as a Sacramento Short Sale Agent, now the government has decided to insist yet another requirement. MARS ( Mortgage Assistance Relief Services )? I think 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 an 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 Sacramento Short Sale Agent, but I also negotiate them for my clients and other agents clients.

California Association of REALTORS (C.A.R.) is in the process of preparing standard forms to assist Sacramento Short Sale Agents comply with these disclosure requirments.Up to that point is up to the Broker and Sacramento Short sale Agent to comply. The Disclosure requirements are generally as follows:

1.Disclose on promotional materials for general commercial communications that the company 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 consumer 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 consumer must pay the broker's total compensation if the consumer accepts the lender's offer, and (3) the consumer does not have to pay the brokerage if the consumer rejects the lender's offer.

3.Disclose when furnishing the lender's offer (Short Sale Approval) to the consumer include items (2) and (3) above, and provide a notice from the lender of the material difference between th elender's offer and the consumer's current mortgage loan. This is the kicker, as this is not a part of all approval letters.

There are also some other requirments 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) began this process back in 2009 in direct 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.