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

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. Let’s clarify some key terms critical to understanding the MARS rule. [12 CFR §1015]

mortgage assistance relief service is 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 aid consumers and individuals who are obligated under any loan secured by a dwelling.

dwelling refers 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]

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

Servicers are the individuals or parties that are responsible for:

  • receiving scheduled payments from a consumer according to the terms of the dwelling loan that is the subject of the offer to provide mortgage assistance relief services, including amounts for escrow accounts under the Real Estate Settlement Procedures Act; and
  • making the payments of principal and interest and any other payments the consumer is obligated to pay according to the terms of the mortgage servicing loan documents or servicing contract.[12 CFR §1015.2]

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

Mortgage assistance relief service providers do not include:

  • the dwelling loan holder;
  • any agent or contractor of the dwelling loan holder;
  • the servicer of a dwelling loan; or
  • any agent or contractor of the servicer of a dwelling loan. [12 CFR §1015.2]

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.