Rumor Control-The Next Round of MARS changes

Tuesday the Combs Law group put out the following announcement.

Combs Law Group, P. C.

Short Sale Listings Will Not Require Mortgage Assistance Relief Services (“MARS”) Disclosures
By: Christopher A. Combs, Esq

After extensive negotiations between the National Association of REALTORS® and the Federal Trade Commission (“FTC”), the FTC has agreed that listing brokers with short sale listings do not need to make the MARS disclosures. Listing brokers will still be prohibited from collecting advance fees.

Listing brokers who advertise for short sales, however, must comply with the MARS advertising disclosures.

If you would like more information regarding deficiency lawsuits, short sales, loan modifications, bankruptcy or other real estate related issues, please call our office at 602.957.9810 and arrange for an initial consultation with one of our attorneys.

Chris Combs
Certified Real Estate Specialist
Combs Law Group, P.C.

While it’s a great headline and welcome news, it’s premature since there is nothing  from the FTC or NAR, that has been reduced to writing that describes what ‘relief’,  if any, real estate agents may be getting from MARS disclosures.  These FTC attorneys are the same people that start their Compliance Guide with this caveat:

This guide, which represents the views of FTC staff and is not binding on the Commission….

So in my opinion, we are waiting on the Commission to decide which part or parts of the Rules should apply or not apply to real estate agents.  Remember these are also the people who have instructed us as to the definition of ‘clear and prominent’ with the following detail:

Pursuant to 16 CFR § 322.2(a)(1) “clear and prominent” means:

1. In textual communications, (which includes any communications in a written or printed form such as print publications or words displayed on the screen of a Computer): the required disclosures shall be
   • easily readable;
   • in a high degree of contrast from the immediate background on which it appears;
   • in the same languages that are substantially used in the commercial communication; in a format so that the disclosure is distinct from other text, such as inside a border;
   • in a distinct type style, such as bold; parallel to the base of the commercial communication, and,
   • except as otherwise provided in this rule, each letter of the disclosure shall be, at a minimum, the larger of 12-point type or one-half the size of the largest letter or numeral used in the name of the advertised website or telephone number to which consumers are referred to receive information relating to any mortgage assistance relief service.

When a written announcement is released by the FTC and NAR, I will post it immediately with the changes or modifications it will require to comply. In the meantime, real estate agents are required to comply with the ‘law of the land as it exists today, i.e. all four MARS Disclosure forms are required for Short Sale transactions after 1/31/2011.

So that’s my opinion and I’m sticking with it until it’s changed in writing.