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kattorney, Attorney
Category: Business Law
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Experience:  16 years experience with a concentration in business, corporate and contracts law
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I have a large client base of home owners who need loan modifications. However,

Resolved Question:

I have a large client base of home owners who need loan modifications.

However, the FTC has banned our ability to charge upfront.
http://www.ftc.gov/opa/2010/11/mars.shtm

I would like to set up a prepaid legal type business with loan modification plans.
We want to charge a monthly membership plan. We have attorneys who will complete the loan modifications.

Is a prepaid legal plan exempt from MARS laws? I've seen local prepaid legal plans and they seem to be eligible for all attorney based exemptions.
Submitted: 4 years ago.
Category: Business Law
Expert:  Fran-mod replied 4 years ago.
Hi, I’m a moderator for this topic and I wonder whether you’re still waiting for an answer. If you are, please let me know and I will do my best to find a professional to assist you right away. If not, feel free to let me know and I will cancel this question for you. Thank you!
Customer: replied 4 years ago.
I am still waiting for an answer
Expert:  Fran-mod replied 4 years ago.
Sometimes, finding the right professional can take a little longer than expected and we thank you greatly for your understanding. We’ll be in touch again shortly.
Expert:  kattorney replied 4 years ago.
A prepaid legal plan is not what you would call "exempt" from the MARS rules. However, setting up a prepaid legal plan would keep you in compliance with the MARS rules, because MARS does not apply to attorneys so long as: They provide mortgage assistance relief services as part of the practice of law; They are licensed to practice law in the state where their client or their client’s home is located; and They comply with all relevant state laws and regulations concerning attorney conduct.

So, as long as you are matching your clients with attorneys in their home states, you would not run into trouble under MARS.

Be careful though about setting up your prepaid plan, as these are regulated differently from state to state. So make sure your plan complies with your state's statutes regarding provision of prepaid legal services. It sounds like a good idea, I help a lot of people with loan mods and short sales and foreclosure defense these days. Good luck!
kattorney, Attorney
Category: Business Law
Satisfied Customers: 1169
Experience: 16 years experience with a concentration in business, corporate and contracts law
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