What Information Must I Disclose to Customers or Prospective Customers according to the MARS Rule?
The Rule spells out several key pieces of information you must disclose clearly and prominently to consumers. Some disclosures must be made in all advertising for general audiences. Other disclosures must be made in one-on-one communications you have with prospective customers, like telephone calls, letters, or email. A third type of disclosure must be made when you give a customer an offer of mortgage relief from his or her lender or servicer. The Rule also requires that if you ever tell a customer that he or she should stop making timely mortgage payments, you must tell them, using these words, "If you stop paying your mortgage, you could lose your home and damage your credit rating."
Disclosures you must make in ads meant for a general audience
The Rule requires certain disclosures in what it calls "general commercial communications" – that is, advertising meant for a general audience, like ads on TV, radio, or the Internet. In those ads, you must clearly and prominently disclose two key facts, in these words:
1. "[Name of your company] is not associated with the government, and our service is not approved by the government or your lender;" and
2. "Even if you accept this offer and use our service, your lender may not agree to change your loan."
The two disclosures must be presented together. The Rule has specific requirements for presenting them.
Disclosures you must make in communications with prospective customers
The Rule requires additional disclosures in any "consumer-specific commercial communication" – that is, a letter, phone call, email, text, or the like, directed at a specific person you're soliciting for your service. In every communication you have with prospective customers, the Rule requires that you clearly and prominently disclose three key facts, in these words:
1. "You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender [or servicer]. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us [insert amount or method for calculating the amount] for our services."
2. "[Name of your company] is not associated with the government, and our service is not approved by the government or your lender;" and
3. "Even if you accept this offer and use our service, your lender may not agree to change your loan."
The three disclosures must be presented together. The Rule has specific requirements for presenting these disclosures to prospective customers.
Disclosures you must make when you give customers an offer of mortgage relief from their lender or servicer
Under the Rule, when you give a customer an offer of mortgage relief from their lender or servicer, you have additional disclosure requirements:
1. You have to give your customer a separate written page that clearly and prominently says "This is an offer of mortgage assistance we obtained from your lender [or servicer]. You may accept or reject the offer. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us [same amount you disclosed upfront] for our services."
2. You have to give your customer a separate one-page written notice from the customer's lender or servicer that explains all material differences between the offer of mortgage relief you got from the lender or servicer and the customer's current loan. Some examples of differences in loan terms that would be material to customers – and would have to be disclosed – include:
• the principal balance;
• the interest rate on the loan, including the maximum rate and any adjustable rates;
• the number of payments on the loan;
• how much the customer must pay each month for principal, interest, taxes, and any mortgage insurance;
• any delinquent payments the customer owes;
• any fees or penalties; and
• the duration of the loan.
3. If the offer of mortgage relief you get for a customer is a trial loan modification – that is, a loan modification that's temporary – the written notice you give your customer from his or her lender or servicer also must disclose the material terms, conditions, and limitations of this type of relief, including:
• That it's a trial loan modification and the duration of the trial period;
• That the customer may not qualify for a permanent mortgage loan modification; and
• If the customer doesn't qualify, the likely amount in suspended payments, arrears, or fees the customer would owe once the trial loan modification period ends.
The Rule has specific requirements for presenting these disclosures to customers.
For more information, see here: www.ftc.gov/os/fedreg/2010/december/R911003mars.pdf
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