Realtors are now required to make specified disclosures before doing short sales. The legal department of the National Association of Realtors (NAR) has come out with a memo to this effect after the publishing of Mortgage Assistance Relief Services final rule (MARS rule) by the Federal Trade Commission in November 2010. The new disclosure rules became effective from January 31, 2010.
All agents, brokers, service providers who offer loan modification as well as short sale services to consumers as a third party firm come under the scope of the MARS rule. As a result, the new disclosure rules apply to them all. They must mention the specified disclosures in their advertisements, promotional campaigns and actual offer letters. Moreover, the font size of the disclosures made must be larger than the rest of the textual matter.
There are three kinds of disclosures depending on the nature of the communications a service provider make to the consumers. These are general commercial communications, consumer-specific commercial communications and when the mortgage relief offer is made to the consumer. The purpose of these disclosures is to make people aware of the fact that the services provided by such realtors are neither approved by the government nor endorsed by the lender or servicer.
If a homeowner chooses any of such services, they must be doing this at their own will knowing fully the possible pitfalls of such services. Moreover, they are made aware of the fact that discontinuing mortgage payment may lead to losing their home and damaging credit rating. The disclosure will also keep open the option to accept or reject the offer made by a realtor.