Upfront fees for mortgage relief services are history

America’s homeowners just gained new protections.  While parts of the Mortgage Assistance Relief Service (MARS) Rule requiring disclosures in advertising and other communications went into effect on December 29, 2010, the ban on upfront fees kicked in on January 31st.  Now, companies that claim to help consumers avoid foreclosure or modify their loans can’t collect a penny until they get their customers what they want.

If your business offers services like these, you may be wondering if you can collect a fee after doing some work, like reviewing and analyzing loan documents, submitting paperwork to the lender, or contacting the lender or servicer.  The answer is no.  You must get from the lender or servicer — and share with your customer — a written offer and a document explaining the key changes to the mortgage.  Just any written offer won’t do.  The customer must accept the offer, and it’s your job under the Rule to tell the customer that he or she can reject the offer without any charge and stop doing business with you at any time.

While attorneys can still collect upfront fees if they meet certain requirements — including placing those fees into a trust account until earned — simply teaming up with attorneys or having them on your staff doesn’t allow you to collect upfront fees.  

Want more information on how to comply with the Rule?  FTC staff has released guidance for both businesses and attorneys.

Know someone struggling to hold onto their home?  This new brochure from the FTC spells out their rights under the MARS Rule.


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