(Washington, DC) - In November 2010, the Federal Trade Commission (FTC) issued the Mortgage Assistance Relief Services (MARS) Rule to protect distressed homeowners from foreclosure relief scams.  The entire rule will become effective January 31, 2011.  Several lawsuits against bogus mortgage relief companies have already been brought by the FTC and other state and federal law enforcement partners.  If you think you are the victim of a foreclosure relief scam, please file a complaint through FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357)

The critical protections of the MARS Rule are: 

• A ban on advance fees:  Mortgage relief companies can not collect any fees until they have provided the distressed homeowner with a written offer from their lender or servicer that is acceptable to the homeowner, and a written document from the lender or servicer that specifies the key changes to the mortgage if the homeowner accepts the offer.
• Disclosures:  Key information must be disclosed by the mortgage relief companies in their advertising and communication to the distressed homeowner, including that they are not affiliated with the government and their services have not been approved by the government or the homeowner’s lender; that the lender may not agree to change the homeowner’s loan; and that homeowners could lose their home and damage their credit rating if they stop paying their mortgage.
• Prohibited claims:  Mortgage relief companies are prohibited from making false or misleading statements about their services, such as performance of promised services, claims about the company’s refund and cancellation policies, provision of legal representation, etc.  A detailed list of these prohibited claims is on the FTC website.  

Although attorneys are generally exempt from the rule, there are specific conditions they must meet as detailed on the FTC website.

For more information about the MARS Rule, go to: http://www.ftc.gov/opa/2010/11/mars.shtm