SEE IMPORTANT ALERT AT BOTTOM OF POST****
It was pretty confusing when the news starting circulating online about FTC MARS (Mortgage Assistance Relief Services) Final Rule. The rule, which came out in December 2010, affects “for profit” companies that help consumers modify loans to avoid foreclosure, including short sales. It outlines prohibitions and disclosure requirements these companies must abide by.
Uh oh! But what about us? Real estate agents help people do short sales all the time. My partner, Broker Bryant, just talked about the FTC ruling and its affect on short sale agents in his recent blog post. He brings up the discussions that were vigorously flowing on www.ShortSaleSuperstars.com courtesy Todd J. Sullivan and Richard Zaretsky on Activerain.
The question is– do real estate agents have to comply? The answer seemed vague to many of us. Some said their State’s board attorneys determined agents must comply. Still, others (including me) did not interpret that from the FTC footnote 126, page 12, that addresses real estate agents. And worse, yet, as Bryant Tutas said, there was nothing specific from the National Association of Realtors about the rule after it came out.
So what did I do? I had enough of the confusion. I was going to call the Federal Trade Commission. Why not? I was tired of reading rumors about how some interpreted the law one way, others didn’t agree, and no one knew for sure.
So I telephoned the FTC. Of course, it wasn’t easy. First I got a clerk who told me he couldn’t answer specific questions about the rule and I had to hire a lawyer. After he saw my persistance, he transferred me to another person, who listened, then transferred me to an FTC attorney. Voice mail! I left a message saying I represented a national real estate forum, www.ShortSaleSuperstars.com, and was looking for clarification about whether real estate agents must comply with the MARS ruling.
One day later? Guess who called me? The FTC attorney. She was quite nice and told me she was a “public servant”. She said real estate agents do need to comply with the ruling. She emphasized that our claims to consumers should not overstate or guarantee the outcome of a short sale. The attorney welcomed further inquiries and said anyone is free to call the FTC and she would also answer questions via email.
So what did I do next? I called the Florida Association of Realtors legal hotline. I had inquired about the ruling a few days earlier. The staff attorneys had not heard of it, so were going to research and get back to me. I told the FAR attorney that I had called the FTC (“YOU Called the FTC?” she gasped) and what I was told about Realtor compliance. The FAR attorney said she wanted to verify the jurisdictional reach of the law, and whether it applied to Florida agents. SEE UPDATE BELOW REGARDING FLORIDA REAL ESTATE AGENTS *****.
My main point, though, is not to be afraid of your government. You are a citizen. You elect, hire and pay the employees of the government, who work for you to better our country. They are not deities. They are not in ivory towers. They are people, and as the kind FTC attorney told me, they are your “public servants”.
***UPDATE: I spoke again with Florida Association of Realtors legal department this morning UPDATE**** They directed me to Chapter 494 Opinion Letter regarding Florida's codification of the SAFE ACT. Florida real estate agents, also see below from the Florida Bureau of Financial Regulation
***UPDATE NUMBER 2 FEBRUARY 25 2011: Florida Association of Realtors legal department has send out a mass email alert and I also received a phone call from the Legal Department Supervisor. Florida Realtors are now required to use MARS FORMS - See MARS Link- Here is the bulletin:
Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or local 850-650-7883 ext 204
Email Wendy: email@example.com