FTC Will Not Enforce Provisions of MARS Rule Against Real Estate Professionals Helping Consumers Obtain Short Sales

In a July 15 news release, the Federal Trade Commission announced that it will not enforce most provisions of its Mortgage Assistance Relief Services Rule against real estate brokers and their agents who assist financially distressed consumers in obtaining short sales from their lenders or servicers. As a result of the stay on enforcement, these real estate professionals will not have to make several disclosures required by the Rule that could be misleading or confuse consumers. More information about the rule and the commission vote can be found here.

The stay applies only to real estate professionals who: 1) are licensed and in good standing under state licensing requirements; 2) comply with state laws governing the practices of real estate professionals; and 3) assist or attempt to assist consumers in obtaining short sales in the course of securing the sales of their homes. The stay exempts real estate professionals who meet these requirements from the obligation to make disclosures and from the ban on collecting advance fees. These professionals, however, remain subject to the Rule’s ban on misrepresentations.