There is a new federal law that was passed by the FTC in November 2010 and went into 100% effect on January 31, 2011. It is called Mortgage Assistance Relief Services (MARS).

This new regulation was created because there are some unscrupulous companies with only one intention; to steal your money. I could say this in more polite terms, but really they are just thieves. They make great sounding claims, charge you a fee up front, and then just disappear or perform no real service. A person in financial straits is still in straits and is now drawing out even more money. The Federal Trade Commission (FTC) is trying to crack down on these predatory companies.

This law is directed at those who are trying to defraud people through relief programs such as loan modifications, forbearances, negotiations on your loan to change payments, and short sales. In short, if any company does something that changes your current mortgage payment, including a sale, it falls under the MARS classification. This would include loan modification companies, attorneys, loan brokers, and real estate agents, just to name a few. Again, apply to these companies/individuals if they are involved with the lenders and are helping you get some type of relief from your current home loan.

This law imposes several responsibilities on these assistance companies. It is important that you know what these new provisions and guidelines are so that you are protected. If someone violates these new rules, don’t do business with them. Let me summarize these supplies. I will discuss them in detail later in this article.

Key points:

• You may not be charged upfront fees

• You can cancel your services at any time without charge.

• If they don’t get you new terms that you agree to, then you owe them nothing.

• Must be 100% honest in all claims and not use misleading advertising.

• They must be honest about any fees that may be charged to you.

No upfront fees

I think this is the biggest provision that will protect consumers. If these crooks can’t get money from you up front, that prevents the companies from not performing or just taking your money and moving on. But the key to this success is letting people know that they can’t be charged a fee up front.

Cancel services at any time

This will protect homeowners from companies that do not meet their expectations. It could be that they are not communicating properly and you are left in the dark. It may be that they are taking a long time to act. If the company or individual helping you does not meet your expectations, you can cancel their services and no fee will be charged.

Terms you agree to

This company conducts negotiations on your behalf and obtains some type of relief for you. They may not charge you yet. They must give you, in writing, the details of the relief you will receive. You must agree to those terms. If you don’t like the relief for any reason, you can say no and you owe nothing. You only pay if you agree to the terms of the proposal. They cannot charge you a fee just to see relief. You have to see it and accept it before someone can charge you.

100% honesty

We would like to believe that every company or person is honest with all of their advertising and dealings. Unfortunately, this is not the case. They use deceptive tactics to gain your trust and business. They may make wild claims like a 100% success rate or ‘I’m an expert’ when in fact they are not an expert.

Another provision under MARS is that businesses/individuals cannot claim to be part of the government by using words like Federal or American. In fact, Mortgage Assistance Relief Service companies are required to go a step further and state in writing ahead of time in all advertising (print, video, and web) that they are not associated with the federal government. They need to be proactive in saying that they are not part of the government and are not approved by the government.

in advance with fees

Finally, they must tell you what they will charge you if they get relief for you that you agree to. They must also tell you who will pay those fees. For example, a loan modification company will charge you, while the lender will typically pay a real estate professional for a successful short sale.

protect yourself

If you are in financial trouble and need the services of a loan modification company or real estate professional, then you should ask them these 3 questions before you start using their services.

1. Are you 100% MARS compliant?

2. Explain to me how you are 100% report MARS

3. Will you put it in writing?

It’s very easy for some people to say yes to question 1, but questions 2 and 3 are much more difficult because they require real answers. If your answer to question #2 differs from what I explained above in any way, then it’s not a MARS complaint. Even if they can verbalize what MARS covers, getting them to put it in writing will be the ultimate test. You see, a MARS compliant company will already have these disclosures in writing. This is an FTC mandate.

Also note that some companies advise people to stop making payments on their mortgage or other bills. This is unnecessary to get relief and it is also illegal to be advised to do so. (That is also part of MARS.)

A final piece of protection comes after you are introduced to the support program. Don’t agree to it right away unless you’re 100% sure the company or agent is 100% honest. If you have any lingering questions, they take the relief information and call your lender to verify the terms.

We have seen scams where people send letters claiming to be the new servicer and sending payments to a new company and address. The sad truth is that these are bogus companies that take the money and then run. I can imagine a company claiming to be MARS compliant and then submitting a bogus aid letter. When in doubt, go slow.

And as always, if something sounds too good to be true, proceed with caution.

Are you facing difficult times financially?

First let me tell you that you are not alone and that my heart sympathizes with everything you are going through. I would like to say proceed with anything you do slowly. I want you to know that you have options. You can learn a little more about all the options available to you by visiting my site at http://www.davidcares.com/hope-4-you