Navigating MARS

16 Jun

An attorney’s insight on MARS

Hopefully the title makes you wonder what an attorney would know about space exploration.  Since my fourth-grade dream of becoming an astronaut didn’t quite pan out, I don’t have much insight to offer about the planet Mars.  Instead, this article will serve as an update to real estate agents, brokers, and real estate brokerage companies impacted by the FTC’s Mortgage Assistance Relief Services (“MARS”) rule.

In short, the MARS rule (the “Rule”) regulates providers of mortgage assistance relief, particularly those businesses who deal with mortgage modification, short sale, and the like (including but not limited to real estate agents and brokers, mortgage brokers, lenders and servicers, accountants and financial planners, and attorneys.  A description of the businesses the MARS rule applies to, and an overview of how/when it applies can be found at the FTC’s “Mortgage Assistance Relief Services Rule: A Compliance Guide for Business”, found here.

Among other things, the Rule requires specific disclosures for oral, written, video, radio, and telephone advertising of MARS services and for referrals to MARS providers; it prohibits the collection of upfront fees for MARS services; it allows contracts between MARS providers and consumers to be cancelled by the consumer; etc.

Resources to help understand MARS

  • MARS Memo – For real estate agents and brokers, particularly those who are members of the Minnesota Association of Realtors® (“MNAR”) it is important to note that a memo offering a comprehensive overview of the MARS rule and its application to the real estate brokerage business was published in the MNAR eResource, here: http://www2.realtoractioncenter.com/site/MessageViewer?em_id=52481.0.
  • Disclosure forms (for real estate agents and brokers) have also been released by the MNAR, to help ensure that MNAR members have the tools to comply with the new disclosure obligations.  If you are not already using these forms within your brokerage, or aware of them, you might want to verify what forms your brokerage company is using to address the required MARS disclosures, in the event that you offer MARS services.

Why should we care?

This recent federal rule carries penalties for violation in the amount of $16,000 per violation.  Although many in the real estate industry did not expect to be navigating the craters and rough terrain of MARS, it is of great importance that those who might be classified as “MARS providers” familiarize themselves with the rules, and learn how to comply with them.  Developing a plan for compliance, a policy to ensure agents/employees follow suit, and ensuring the appropriate disclosures are made may require involving your attorney or legal counsel.

As you begin to explore MARS and adapt to the new environment, it’s wise to understand the rules of the road and obtain appropriate guidance and counsel.

________________
Follow brokerageatty on Twitter

This blog entry is written by Brad Boyd, a Shareholder at Thomsen Nybeck. Brad is the chair of the firm’s Transactional Group, and his practice focuses primarily in Real Estate, Real Estate Brokerage, Business and Corporate law, and Wind Energy Law.  Brad provides legal advice, guidance, and representation related to risk management in a wide variety of real estate and business law matters.  He is counsel to the Minnesota Association of Realtors, many individual Realtors and brokerages, business clients and individuals.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: