First let me disclose, I'm a 3rd party negotiator, but our business model never takes an up front fee.  We are only paid if we can close the sale.  I recently had a homeowner contact me that wants to work with me, that had another 3rd party negotiator working for him.  He sent me their contract.  There is no fee for negotiation, however, there is an interesting fee of $500 for cancelation.  So this person hasn't negotiated anything yet for 6 months and this person has to pay a fee to cancel?  There are no MARS disclosures anywhere in the paperwork and the agreement is for a "consultancy" company, not the person's name doing the negotiation.  I did look her up.  She's a licensed RE agent, but the contract does not mention her name anywhere.  So his agreement isn't with a licensed agent but with a firm (WHO SHOULD HAVE MARS DISCLOSURES) if they aren't negotiating as an agent right?  I'm not sure what to make of this.

Our state does not require us to be a licensed RE agent to negotiate, however, if you're not going to act as a RE Agent, and set up a consultancy firm as a 3rd party negotiator wouldn't MARS FTC disclosures be required?

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As a 3rd party company,our understanding is that the homeowner can only be obligated to pay (cancellation fee or otherwise) once they have accepted the lender's approval letter in writing.  We send them an additional document with the actual approval where they accept it, and agree to proceed to the closing, hold us harmless, etc.  

If this company never provided an approval and if the seller never accepted it, I would guess that no cancellation fee would be due. I'm not an attorney I would suggest you again review the MARS rule and the agreement.  

Justin THAT makes sense to me, but I don't understand why they would have to pay when an approval was never obtained. Actually now I'm confused.  MARS disclosures state that if a seller doesn't agree to the terms they don't have to pay the negotiator. 

In most states, foreclosure rescue laws prohibit any type of fee if there has been no approval.

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