The Federal Trade Commission (FTC) recently issued new rules that may impact real estate practitioners representing short sale clients involved in short sale transactions. Depending on certain factors, the Mortgage Assistance Relief Services (MARS) rules could require disclosures to consumers when negotiating a short sale with a lender or advertising short sales experience. The rules were issued to protect homeowners from mortgage relief scams that continue to spring up during the mortgage crisis. The most significant rule under the FTC’s new rule is the advance fee ban. Under this provision, mortgage relief companies may not collect ANY fees until they have provided consumers with a written offer from their lender or servicer that the consumer decides is acceptable and a written document from the lender or servicer describing the key changes to the mortgage that would result if the consumer accepts the offer. The companies must also remind the consumer of their right to reject the offer without any charge.
Attorneys are generally exempt from the FTC rule if they meet three conditions: 1) they are engaged in the practice of law, 2) they are licensed in the state where the consumer or dwelling is located, and 3) they are complying with state laws and regulations governing attorney conduct related to the rule. To be exempt from the advance fee ban, attorney must meet a fourth requirement – they must place any fees they collect in a client trust account and abide by state laws and regulations governing such accounts.
The attorneys at Deardorff & Moon, LLC, the law firm supporting Lakeside Title Company, never charge any upfront fees when negotiating short sales and the initial 30 minute consultation is also free of charge. To schedule a free 30 minute consultation with one of the Deardorff & Moon, LLC attorneys, please call 410-992-1070 and ask for Sarah Couey or Jamie Bauguess who are both responsible for scheduling the free consultations.