On December 29th, 2010 the Federal Trade Commission put into effect new rules pertaining to short sales which will impact many short sales in the Spokane/Coeur d’Alene areas.
In a nutshell, the new MARS program (Mortgage Assistance Relief Services) puts strict limitations on the promises a short sale negotiator can make, and the fees they can collect. Providers are required to have strong factual evidence to backup any claims made in advertising.
Additionally, providers are required to make the following disclosures upon entering into a service agreement with a distressed homeowner:
- they are not associated with the government, and their services have not been approved by the government or the consumer’s lender;
- the lender may not agree to change the consumer’s loan; and
- if companies tell consumers to stop paying their mortgage, they must also tell them that they could lose their home and damage their credit rating.
Washington State has additional rules,
- Short Sale Services are limited only to those who: 1) Are licensed Washington real estate agents performing the services in conjunction with a listing (only the agent with the listing may work with the bank on the Short Sale). 2) A licensed mortgage broker. 3) An attorney licensed in Washington State.
Some things to watch out for:
1) Firms calling you from outside Washington State offering to help you navigate a short sale
2) Firms calling you and requiring an upfront fee for the services of navigating a short sale
Like every major decision, the decision to conduct a short sale should be discussed with your trusted accountant and real estate attorney as there are significant impacts on your credit and future.
Have questions, comment or call us!