FTC’s MAP Rule

31 Aug

From MARS to MAP

Many real estate professionals have been alerted to and following the developments with the FTC’s somewhat recently enacted MARS Rule.  Now, there’s an even more recent real estate related regulation to become familiar with.

For real estate professionals who try to stay alert to ongoing or new laws impacting their profession, it’s time to consider the FTC’s MAP rule, if you haven’t already come across this.  The Federal Trade Commission’s MAP (Mortgage Acts and Practices – Advertising) rule seeks to prohibit misrepresentations by those who provide information about mortgage credit products to consumers.  As a result, it impacts real estate agents and brokers who may be involved in prequalifying a candidate for a mortgage, offering information about a specific mortgage product, products, or lender, etc.  Beyond the prohibition on misrepresentations, it imposes record-keeping and disclosure duties and obligations.

As usual with Federal legislation, the full text of the rule is not a quick read.  For those inclined to acquaint themselves with the specifics, the entirety of the MAP rule can be found at the FTC’s website, here: http://www.ftc.gov/os/fedreg/2011/07/110719mortgagead-finalrule.pdf.  You’ll note the Rule took effect August 19, 2011.  As with any federal law that may impact your business or your business practices, you should consult with your own legal counsel to determine if it applies to you, and if so, how it applies and what you must do to adhere to the law.

For an excellent analysis of the MAP Rule’s application real estate agents and real estate brokerages, this National Association of Realtors(R) (“NAR”) article is worth reading: New FTC Rule May Impact Brokerages.

Very broadly, a commercial communication about any term of a mortgage credit product must not be misrepresented.  Offering information about a specific mortgage product to a consumer (such as a rate sheet containing current interest rates offered by a lender) would trigger the Rule.  The Rule requires records to be maintained for at least two years, and that specific disclaimer language is prominently identified, to protect against misrepresentation claims.  For more information, review the NAR article, the full text of the Rule, or seek the advice of legal counsel.

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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.

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