Scotsman Guide - May 2010 Residential Edition

By Jose A. Silva Vice president and co-founder ForeclosureDump.com

What to Know About
Deficiency Judgments en d s
Informing yourself about these legal claims could
keep clients from future debt

Many homeowners believe that short selling their home, walking away from it or having a lender foreclose on the property would solve their financial problems. What they’re not aware of, however, is that they could remain responsible for any difference between the mortgage amount owed and the price the home is sold for even after a short sale or foreclosure.

To collect this difference and minimize its losses, a lender can file a deficiency judgment against the borrowers.

Mortgage brokers should understand
what deficiency judgments are and how
they work. They also should know that
the risks associated with deficiency
judgments are of a legal nature. Brokers
who aren’t attorneys must advise cli-
ents facing deficiency judgments to
seek competent legal advice.

This article provides general information and should not be construed as legal advice. Consult a legal professional or tax adviser for specific guidance.

Jose A. Silva is vice president and co-founder of ForeclosureDump.com, an online-mar-keting service bringing together buyers and sellers of foreclosures, real estate owned properties and credit-distressed properties without middlemen or commissions. He has more than eight years’ experience in hard equity. He was on the board of the Florida Association of Mortgage Brokers’ Miami chapter from 2004 to 2007 and was FAMB’s state director from 2005 to 2007. Contact: JoseSilva@ForeclosureDump.com, (888) 960-2555 or www.ForeclosureDump.com.

By B.J. Bounds
Senior marketing communications
specialist
Calyx Soft ware

Understand Compliance – Then Promote It i nce – Then Prom
Your loan platform often is key to tying these elements together

Simple-but-effective use of tech- nology can help mortgage bro- kers turn recent regulation changes into new business. Before you make any platform- or software-re-lated move and use it to market yourself as a broker with high standards, however, you must understand and follow the new rules, including those set forth by the Secure and Fair Enforcement for Mortgage Licensing Act — aka, the S. A.F.E. Act.

Inside the regulation Among other things, the S. A.F.E. Act implemented a requirement that loan originators be licensed by their state and register with a national database unless they work for federally regulated depository institutions or subsidiaries. Originators who work for depository institutions don’t need a license, but their employers must enter them in the national database. All originators — regardless of where they work — also must obtain a permanent identification code for electronic tracking of all loans they originate.

In light of compliance challenges — and competition from those who don’t face the same licensing requirements — brokers must do everything they can to manage and grow their business.

One of the biggest requirements of the S. A.F.E. Act was the mandate that all loan originators be properly licensed, registered or both and that their identifier codes appear on residential loan applications. Fannie Mae has changed its 1003 uniform loan application (form No. 65 for Freddie Mac) with this in mind.

The new 1003 — already available but not required by Fannie Mae until July 1 — contains fields at the bottom of Page 4 to capture identification information, including identifier codes, from the loan originator and loan originator’s company.

Part of the S. A.F.E. Act’s intent was to reduce fraud and protect consumers’ interests. By requiring a single federal database of loan originators, industry offenders will find it harder to shield criminal activities by changing states to escape detection.

Then again, we can’t attribute all
fraud to intentional acts. Much of it is in-
advertent, the result of mistakes made
by uneducated industry participants.

S. A.F.E.-related marketing

One way mortgage brokers can use licensing and testing to their advantage is by marketing themselves as topnotch professionals who have met the highest industry standards. You can do this by looking at popular loan platforms and selecting one that best fits your business. Your platform should:

Be user-friendly; •
Offer customizable security and •
accessibility;
Provide electronic document •
storage;
Include mandatory compliance •
updates; and
Incorporate marketing tools. •

Marketing represents one of the most-important aspects of growing your business. Moreover, you often can accomplish your marketing goals easily and inexpensively if you have the right tools. In many cases, that means using your chosen technology platform to let people know aboutyour business.

You also can use your current contact list or purchased lists to send mail or e-mail correspondence. Any technology platform you select should create marketing materials such as letters, postcards, e-mails and brochures promoting you as mortgage broker who upholds the industry’s newly minted high standards. •

B.J. Bounds is the senior marketing communications specialist for Calyx Soft ware. In addition to media relations and copy writing, Bounds is a contributing author to the Calyx Soft ware blog, CalyxCorner. She has more than 10 years’ experience in sales and corporate marketing with a focus on technology that spans several industries. For more information on Calyx Software, contact (800) 362-2599 or visit www. calyxsoftware.com or www.calyxcorner.com.