By Jose A. Silva
Vice president and co-founder
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
To collect this difference and minimize its losses, a lender can file a
deficiency judgment against the
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:
960-2555 or www.ForeclosureDump.com.
By B.J. Bounds
Understand Compliance – Then Promote It i nce – Then Prom
Senior marketing communications
Calyx Soft ware
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 •
Provide electronic document •
Include mandatory compliance •
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.