No Enforcement of MARS Rule against Real Estate Agents

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

Today, July 15th, the Federal Trade Commission issued a Press Release found here that notices the Real Estate Community that they will not enforce certain provisions of the MARS rules against Real Estate Agents.

“As a result of the stay on enforcement, these real estate professionals will not have to make several disclosures required by the Rule that, in the context of assisting with short sales, could be misleading or confuse consumers. As more and more American homeowners seek short sales, it is especially important that the Rule not inadvertently discourage real estate professionals from helping consumers with these types of transactions.”

The forbearance on the enforcement of this provision passed in a 5-0 vote. It was clear from the beginning that this rule created many confusions for the Real Estate Community and Consumers looking to sell their property in a Short Sale. FTC went on to explain that the FTC will continue to enforce the Rule and Section 5 of the ACT that which prohibits unfair and deceptive practices against Real Estate Agents.

The Stay against enforcement applies 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.

In conclusion this is a great move on the part of FTC and credit goes to NAR for their effort to work with the FTC. Of course, this will change the makeup of many of the classes on MARS being taught in Arizona and will allow licensed agents in Arizona to go back to helping Arizona families affected by this downturn in short selling their homes.

To be clear, this does not have any affect on recent comments from Arizona Department of Real Estate on the requirements on licensing of Real Estate Agents that negotiate Short Sales. Per ADRE

Remember- the Arizona “Short Sale Negotiator Regulations” issued by the ADRE on February 15, 2011 remains in effect, as well as the requirements of A.R.S. §32-2155 which states:  Restriction on employment or compensation of person as broker or salesperson

C. A real estate broker or real estate salesperson shall not collect compensation for rendering services in negotiating loans secured by real property unless all of the following apply:

1. The broker or salesperson is licensed pursuant to title 6, chapter 9 or is an employee, officer or partner of a corporation or partnership licensed pursuant to title 6, chapter 9.

2. The broker or salesperson has disclosed to the person from whom the compensation is collected that the broker or salesperson is receiving compensation both for real estate brokerage, when applicable, and for mortgage broker services.

3. The compensation does not violate any other state or federal law.


How do I refer clients to Arboleda Brechner?

Go to this link and complete the short form and then follow the directions given by the emails that follow. When your client sits down for their consultations we will already have the information necessary to move straight to the answers. We will not waste your client’s money or their time. We highly encourage our referring agents to come to the first few consults, with client permission, so that you can see firsthand what we do and say.

Thank you to those agents that have been loyal to us over the last few years. We are grateful for your trust. For those that have yet to work with  us. Let us earn your business.


If you have any questions please call our firm. The Mortgage Mediation Group is a practice group of the Law Firm of McCarthy Law. This group is focused on assisting homeowners facing a point today or in the future when they can no longer afford their mortgage or it no longer is feasible to pay AND owe more than their home is worth. Solutions can range from Mortgage Liability Review, Short Sale Review and Negotiation, Loan Modification, Lien Settlement, Foreclosure Defense, Deficiency Defense, Deed in Lieu and Bankruptcy (Chapter 7, 13, Lien Strip and Mortgage Cramdown).


About Kevin Hardin

Kevin W. Hardin is a 22 year veteran of the Mortgage and Real Estate industries. He holds a Juris Doctor (JD) degree from Concord Law School and a CMB (Certified Mortgage Banker) from the Mortgage Bankers Association. He is a Senior Loan Officer at HomeStreet Bank. He works with Borrowers, Attorneys, Title Companies, Real Estate Agents and Mortgage Companies on mortgage law issues.

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