The Mortgage Assistance Relief Services (MARS) rule that went into effect on January 31 of this year could present a threat to real estate agents who represent clients on Short Sale transactions, said the National Association of Realtors (NAR) yesterday [1]. While it will not prevent real estate agents from continuing to help homeowners negotiate short sales, it will directly impact the specific wording that they must use when establishing a relationship with the owner and will prevent the acceptance of any upfront fees of any kind. The MARS rule “bans all upfront fees for renegotiating mortgage terms and mandates that certain disclosures are made to consumers” during the process.
Laurie Janik, NAR general counsel, advises all real estate professionals to “include a clear and prominent disclosure in all commercial messages that advertise short sale services.” Furthermore, additional disclosures are required as the client-realtor relationship is established in order to fully protect both parties, she said. NAR addressed the issue directly at its trade expo last weekend to clear up any confusion on the part of realtors about whether or not they needed to comply with MARS rules [2]. Janik stated unequivocally that “any realtor working on a short sale transaction are subject to the rule if they negotiate a short sale with a lender, advertise short sale experience or take any up-front fees from their clients.”
Although NAR was speaking directly to its real estate agent members, it is clear that this rule will apply not just to realtors, but to anyone involved in short sale negotiations and will likely have a dramatic impact on the way that many short sale investors initiate their business with distressed homeowners.
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Christopher Herbert, Realtor/Public Adjuster.
