Home Counseling Advocates

The FTC MARS Rule makes it illegal for a company offering mortgage assistance relief services to collect any fees at all until it provides a written offer for a loan modification or other relief from your lender and you accept the offer. They must also provide documentation from your lender showing the changes to your loan if you decide to accept the lenders offer and clearly tell you the total fee they will charge for their services. It is illegal to divide fees or services into components for the purpose of avoiding this law. Under the same rule, attorneys who offer mortgage relief services can require an advanced fee ONLY if they: are licensed to practice law in the state where you live or where your house is located; they're providing you with real legal services and providing mortgage assistance relief services as part of the practice of law; they're complying with state ethics requirements for attorneys; AND they place the money in a client trust account withdraw fees only as they complete actual legal services and notify you of each withdrawal. Under this same rule attorneys cannot misrepresent any material aspect of their legal services including the likelihood they'll get a favorable result and attorneys cannot engage in a widespread telemarketing operation staffed by non-attorneys.

HUD approved housing counseling agencies are exempt from this law. For mortgage relief regulations specific to your state, please check with your local or state agency that regulates this industry.