Confused About FTC MARS? Enough Rumors – I Called The FTC! **FLORIDA UPDATE February 2011

Nice clarification Wendy.

I so agree where is NAR? Since the state associations get their marching orders mostly from NAR, I'll give them a pass as just like your FAR didn't know.

Also goes to show you, Wendy, that your own state Association might not be up on all the latest information.

Wendy, I'm surprised the associations aren't up to speed on this since it does look like it applies to real estate agents. Keep us posted.

I like your gutsy position Wendy.  I wonder, however, if this is like asking the Internal Revenue Service to do you taxes, and every person comes out with a different number.  I totally agree when we don't know the answer we seek someone who does.  There is always the adage "don't be the source, be the source of the source".

Hi Wendy: I read through the MARS link you provided, and actually, I believe that as a real estate agent we are already prohibited from doing those things because those things constitute practicing law. We are not licensed, as an agent, to practice law. We can't "guarantee" any short sale outcome, nor can we advise clients to stop making their payments, etc. So we don't need MARS to apply to us because we are, like it or not, already governed under those guidelines.

But good for you for calling the FTC and not taking no when you got the runaround. No wonder you're a great short sale agent! Go Wendy!!!

Wendy:

Here is the problem I see with what the FTC attorney says — it's an opinion from the FTC attorney! Actually, the best information you got was from the first clerk you talked to at the FTC, who said you'd need to hire an attorney.

Really, in essence, each individual state's real estate commissions make the rules we follow in our states. They are the ones who need to make the interpretation of the FTC rules and, ultimately, they are ones who need to hire they attorneys to get this settled.

But, that being said ... what is the harm in following those rules/guidelines now — even if ultimately it is decided that real estate agents don't need to follow them? Savvy agents who handle short sales should already have a set of disclosures that are very similar to these rules, anyway. It might take a little tinkering with those disclosures, but it's not that big of a deal.

Jurisdictional reach of the law -- hmmm...I will be curious to see how this plays out, as the law can be very complex indeed, oftentimes because the lawyers who write them aren't specific enough.

Wendy - Good for you to refuse to be deterred from your mission to discover the truth! I will respectfully disagree with Aaron (#32); being told to "hire a lawyer" in order to understand government rules that are being imposed on us and that you just want to follow in good faith is outrageous. I have seen people with barely two dimes to rub together robbed by advance fee scam artists, so I understand the need for regulation, but this is typical govenment let's kill a mosquito with a cannon. Hopefully some clarity will emerge and we can get on with doing our jobs and helping people.

Aaron #32- We do make many disclosures to our potential sellers before they sign a listing agreement. That is not the issue. The issue is that this rule is still very vague and where they require those disclosures to be. 

Also, it only benefits the banks and lenders who want to get into the real estate business. They of course are exempt. 

What really bothers me is that the servicers  have a fiduciary relationship with their investors, the note owners. The homeonwer who pays their mortgage payment to the servicer is a customer not a client. But no where in this ruling do servicers have to disclose this so that the homeowner really thinks the bank is there to help them! This is an outrage. They punish all of us, but don't even make banks disclose anything in regards to short sales. 

The other thing that is really awful about this is where you have to put the 10 sentences. That means they just took away your ability to get good SEO rankings, your ability to advertise and your ability to compete with the banks in advertising. Your keywords need to be above the fold on your website and in your blog posts. If this huge disclosure has to be there first and it does say it has to be above the fold, there goes  28% of your on page ranking factors down the tubes. Katerina

Wendy- So that means no more postcards:) Or the post card would only be the disclosure! Hah! Great marketing that is, scare the begeezies out of the homeowner first! 

Hi Wendy, our government forgets that they work for us! Congrats on the feature!

It will be interesting to see how this works out in the coming months.  I haven't heard anything from my state board, or NAR, on this.

"She emphasized that our claims to consumers should not overstate or guarantee the outcome of a short sale."

I think that's what everybody really needs to know about the whole thing.. Some of the things I hear from sellers who have talked to whoever amazes me.

Second -- I think the FTC ruling applies to services that take an advance fee. No shortage of stories of sellers that paid some advance fees for a loan modification and nothing happened for them. I've heard of short sale agents requiring advanced fees to take short sale listings and I've looked into doing this myself but too much uncertainty from the powers to be.

I've come across some agents disguising it as a Broker Administration Commission (AKA transaction fee) paid up front but I hardly think the risk is worth the reward if by chance somebody with "do what we tell you" power really looks closer at why they are requiring this fee up front.

Great post. If you need information go to the source!

I, too am surprised when I hear about the people who have paid large fees for loan mods or upfront fees for short sales.  These bad apples give us all a bad name.

Good job, Wendy... I am so proud of you for doing this!  Proactive to say the least!