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FTC Cancels MARS Disclosure Rule for Realtors But....

Posted by Wendy Rulnick on July 15, 2011 at 11:07am in Short Sale Discussions

"WASHINGTON – July 15, 2011 – In a move the National Association of Realtors® calls “a substantial victory for Realtors,” the Federal Trade Commission (FTC) announced that it will not enforce most of the provisions of the Mortgage Assistance Relief Services (MARS) rule against real estate licensees

As a result of the stay on enforcement, real estate licensees who provide short sale services will not have to make the disclosures required by MARS as far as the FTC is concerned. However, the FTC announcement also gave Florida Attorney General Pam Bondi the ability to overrule the FTC within the State of Florida.

Florida Realtors has contacted Bondi’s office, but an official answer isn’t expected before next week at the earliest. In the meantime, Florida Realtors Law and Policy department recommends that Realtors continue to use the MARS disclosures until further notice."

Let's hope Ms. Bondi agrees with the FTC.

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Replies

Becky Anderson July 24, 2011 at 12:15pm

We wont pull our disclosures. It's just cover your rear end smart business. Especially with so many agents forgetting the Seller still should be getting the highest and best for their property.
Bryant Tutas July 23, 2011 at 11:51pm

Check with your State's laws. They are ways to charge a fee at time of listing that are perfectly legal. I can charge an upfront fee with my Florida brokerage. What I can't do is charge an upfront fee specific to the negotiating of a short sale.
Thom Colby CA Brkr 888-391-5245 July 23, 2011 at 12:20pm

No up front fees for RE Brokerage Services. Fees (Commissions) can be collected AFTER services have been provided and the transaction is closes.
Patrick Fleming July 23, 2011 at 8:58am

This law seems applicable only to "negotiating loans". Is there a restriction from upfront fees for real estate brokerage services that do not involve loan negotiating?
Kevin Hardin July 18, 2011 at 5:35pm

Arizona is also not allowing upfront fees.

A.R.S. §32-2155 which states: Restriction on employment or compensation of person as broker or salesperson

C. A real estate broker or real estate salesperson shall not collect compensation for rendering services in negotiating loans secured by real property unless all of the following apply:

1. The broker or salesperson is licensed pursuant to title 6, chapter 9 or is an employee, officer or partner of a corporation or partnership licensed pursuant to title 6, chapter 9.

2. The broker or salesperson has disclosed to the person from whom the compensation is collected that the broker or salesperson is receiving compensation both for real estate brokerage, when applicable, and for mortgage broker services.

3. The compensation does not violate any other state or federal law.

http://kevinhardin.com/no-enforcement-of-mars-rule-against-real-est...
ElizabethWeintraub00697006LyonRE July 18, 2011 at 3:17am

Same thing in California. Attorney General can overrule. Not only that, but the newly formed Consumer Financial Protection Bureau is taking over MARS from the FTC this Thursday. The CFPB will then govern the law, and the law has not changed, people.
Stephen B. McWilliam July 17, 2011 at 1:14pm

No, they're typically referred to as Limited Service Brokers. Those operating in that fashion will operate as a No Brokerage Relationship capacity as defined in Florida law. Considering a short sale lender will pay a full service brokerage fee in most cases there would be little incentive for almost any Seller to engage a Limited Services Broker.
Patrick Fleming July 17, 2011 at 1:11pm

Does Florida law prohibit traditional sellers to pay a flat-fee up front for MLS/realtor.com advertising or are only shortsale sellers precluded?

Stephen B. McWilliam said:

Interesting concept. However, I don't know why any Seller would do that considering the short sale lender pays the broker's commission. It doesn't save the Seller any money. In the case of that type of listing the Seller is really simply requesting it to be advertised by the broker. In Florida, the legal definition is typically No Brokerage Relationship.
Maya Thomas July 17, 2011 at 8:51am

What a time saver!
Stephen B. McWilliam July 17, 2011 at 8:36am

More specifically it is the Federal SAFE Act which prohibits these charges. All states were required to incorporate the SAFE Act into their laws. Typically, the state will act on violations long before the Federal government will unless it involves a great deal of money and/or customers. Besides it being a felony in Florida the state can take administrative action against the real estate license.