Florida Real Estate News “A roadmap to the new, mandatory FTC disclosures for short sale transactions”
There are 3 possible disclosures the FTC Mortgage Assistance Relief Services (MARS) regulations may require if you are advertising your services for short sale assistance, negotiating a short sale for a consumer or arranging a short sale on behalf of a consumer. The first would not be necessary if you are not advertising your services. The National Association of Realtors summarized them:
Disclosure #1:
General Commercial Communication. Real estate professionals who advertise MARS services not directed at a specific consumer will need to include in all ads a clear and prominent disclosure with the following: “IMPORTANT NOTICE: (Company Name) is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.” Notice must be in 2 point-type larger than the font size of the disclosure.
Disclosure #2:
Consumer Specific Communications. The second disclosure is required in all communications that the MARS provider directs to specific “prospective” clients. These disclosures need to be made by a real estate professional who represents a seller in a short sale transaction, unless the seller has engaged a short sale negotiator independently. These communications must be provided by the MARS provider before the provider begins mortgage-assistance services on behalf of the consumer. To comply with this disclosure requirement, a listing
broker should provide a letter to the client once he/she is aware the transaction may be a short sale, and prominently display the disclosure statement. Florida Realtors has created a disclosure form to assist real estate firms in making this disclosure required by the FTC regulation.
Disclosure #3.
Disclosures When Providing an Offer of Mortgage Relief(short sale approval!) The third disclosure needs to be provided in a clear and prominent manner at the time the real estate licensee presents his/her client with the lender’s short sale approval letter. The licensee must also provide a notice from the lender or servicer that describes all material differences between the seller’s current loan and the lender’s proposal to modify the loan if the seller accepts the short sale offer, which may include the lender holding the seller liable for the deficiency amount. This information will likely be contained in the lenders short sale approval letter Florida Realtors has created two separate disclosure forms to assist real estate firms in making this third disclosure required by the FTC MARS rule. You should use these forms, or similar forms, when presenting the consumer a written agreement from the consumer’s lender that incorporates the offer of mortgage assistance relief (the short sale approval letter in all likelihood) and when providing the seller or consumer with the notice from the lender detailing the difference between the original mortgage terms and the new offer terms. They are two separate disclosure forms since the FTC MARS rule requires each disclosure to be on a separate written page.