Mortgage Concepts: What is the MARS Rule? | firsttuesday Journal – first tuesday Journal

Mortgage Concepts is a recurring video series covering best practices and compliance education for California mortgage loan originators. This video discusses the Mortgage Assistance Relief Services (MARS) rule. For course credit toward renewing your NMLS license, visit firsttuesday.us.

Regulation O enacts the Mortgage Assistance Relief Services rule, or MARS rule, which is designed to protect consumers by banning potentially deceptive practices in mortgage relief. The MARS rule and Regulation O went into effect in 2010 in response to widespread abuse of consumers in mortgage distress. The guidelines and restrictions are intended to aid transparency between service providers and consumers.

Originally, the Federal Trade Commission had rulemaking authority over the MARS rule, but that authority shifted to the Consumer Financial Protection Bureau in July of 2011. Lets clarify some key terms critical to understanding the MARS rule. [12 CFR 1015]

Amortgage assistance relief serviceis any arrangement, offering or program provided to consumers claiming to aid them with mortgage-related issues.[12 CFR 1015.2]

Mortgage assistance relief services are designed to aidconsumers and individuals who are obligated under any loan secured by a dwelling.

Adwellingrefers to a residential structure containing four or fewer units largely used for personal, family or household purposes. The structure does not need to be attached to real property to be considered a dwelling. Residences considered a dwelling include individual condominium units, cooperative units, mobile homes, manufactured homes and trailers.[12 CFR 1015.2]

Adwelling loanis any loan that relies on a dwelling and its associated deed of trust or mortgage as collateral. Thedwelling loan holder is the person or party who possesses the dwelling loan subject to a mortgage assistance relief service. [12 CFR 1015.2]

Servicersare the individuals or parties that are responsible for:

Any person or party who provides, extends an offer to provide or arranges for others to provide any mortgage assistance relief service qualifies as amortgage assistance relief service provider. [12 CFR 1015.2]

Mortgage assistance relief service providers do not include:

Real estate professionals who negotiate or otherwise arrange short sales for their clients are considered mortgage assistance relief service providers. Note that in 2010 the FTC issued a stay of compliance for real estate professionals assisting consumers in negotiating short sales.

Read the original here:

Mortgage Concepts: What is the MARS Rule? | firsttuesday Journal - first tuesday Journal