If you offer mortgage assistance relief services – or work with companies that do – it's wise to know about the provisions of the Mortgage Assistance Relief Services (MARS) Rule.
Here are some compliance highlights from the FTC Guide, tips on complying with the Rule.
• It's illegal to charge upfront fees. You can't collect money from a customer unless you deliver – and the customer agrees to – a written offer of mortgage relief from the customer's lender or servicer.
• You must clearly and prominently disclose certain information before you sign people up for your services. You must tell them upfront key information about your services, including: ◦the total cost,
◦ that they can stop using your services at any time,
◦ that you're not associated with the government or their lender, and
◦ that their lender may not agree to change the terms of their mortgage.
• If you advise someone not to pay his or her mortgage, you must clearly and prominently disclose the negative consequences that could result. You must warn customers that failure to pay could result in the loss of their home or damage to their credit rating.
• Don't advise customers to stop communicating with their lender or servicer. Under the Rule, it's illegal to tell people they shouldn't communicate with their lender or servicer.
• You must disclose key information to your customer if you forward an offer of mortgage relief from a lender or servicer. You must give your customer a written notice from the lender or servicer describing all material differences between the terms of the offer and the customer's current loan. You also have to tell your customer that if the lender or servicer's offer isn't acceptable to them, they don't have to pay your fee.
• Don't misrepresent your services. Under the Rule, it's illegal to make claims that are false, misleading, or unsubstantiated.
For more information, see here: www.ftc.gov/os/fedreg/2010/december/R911003mars.pdf
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