Keeping You Informed

Summer Newsletter

Summer 2013
In This Issue
Uniform State Testing Advocacy
Becoming a Conscious Leader
Newsletter Submissions
President's Message
Association Work and Planning
Mortgage Action Alliance
Committee Sign Up!
60th Annual Convention
Legislative Update
Chapter News
Visit our Chapters
Future Leaders Needed
Legal Update
Thank You Sponsors!
Realtors Offering Free Friday
2013/2014 Board of Directors
Welcome New BOD!
Executive Committee


Alex Castellanos




Jay Ralstin

Hancock Bank Mortgage Division



Sandy Garcia

Sierra Pacific Mortgage



Kevin W. Strickland

SunTrust Mortgage Inc



Pat Gaver

Capital City Bank



Matthew Goldman, CLO




Daniel Harrison




John Cosculluela

American Bancshares Mortgage


Carole Hendricks


Michael Azzarello, CMB
Platinum Home Mortgage 

Jamie A. Thornton   


Dana Cummins



Dustin Owen
Waterstone Mortgage Corp.

Ben Fant
Affiliated Mortgage Companies

Associate Director

Dena Howrigan

United Guaranty


Director Emeritus

Margie Fletcher (elected 2005)  


Chuck Ivy (elected 2006)



Georges Lussier (elected 2010)


Local Chapter Presidents


Matthew Goldman, CLO 




Joe Adamaitis




Randy Galloway




Randi Gocinski




Tim Allen, CMB 




Brett Bosarge 




D.J. Rondeau

Bay to Bay Lending

Thank you for being a member of the MBA of Florida
The MBAF dues invoices were mailed in May and a reminder sent in July. If your name is not listed than we have not received your payment yet. Contact MBAF for assistance at

Financial Institution Members


Academy Mortgage Corporation

Affiliated Mortgage

Bank of America

Capital City Bank

Community Bank

CTC Mortgage LLC

Embrace HomeLoans

First Commerce Credit Union

Florida Capital Bank

Florida Housing Finance Corp.

Group One Mortgage

Hamilton Group Funding

Hancock Bank

Regions Mortgage 

Sierra Pacific

SunTrust Mortgage

The Mortgage Firm

The StoneHill Group

Thomas Mortgage & Financial Services 

Towne Mortgage Company

VyStar Credit Union

Wells Fargo


Associate Members

Attorneys' Title Insurance Fund, Inc.


Essent Guaranty

Interthinx, Inc.

National MI



Southern Title Holding Company


Local Chapters

Gulf Coast MBA

MBA of Central Florida

MBA of South Florida

MBA of SW Florida

MBA of Tampa Bay


Individual Members

Jane Ashley

Michael Azzarello, CMB

John Chludzenski

John Cosculluela

Matthew Goldman, CLO

Scott Hornick

Julie Sneed



New Members Interested in Joining Click Here 



 Members Log In Link Below
You are able to view your membership record, search for other members, register for any conventions or conferences when available and view your committees that you are on. The main member contact is able to make changes and pay your dues too!  It's easy and takes just a minute to get started.
CMB Society of Florida

The CMB Society of Florida is beginning a new year coinciding with the MBA of Florida's fiscal year, July 2013 through June 2014.  As chairperson again this year, I am reaching out to you as CMB's either residing in Florida or doing business in the state of Florida.  I wanted to take a few minutes of your time to congratulate you on your successes and encourage your continued participation within our CMB Society through written and oral communication to keep our CMB Society of Florida strong and informed.


One way of participating is through the CMB Society of Florida LinkedIn Group. If you have not already done so, please join our "CMB Society of Florida" LinkedIn Group and actively post comments or articles of interest. We welcome your comments and interaction either through LinkedIn or directly. Last year we organized to provide some feedback to the National CMB Society about Continuing Education requirements for CMB's. Although CE is not yet finalized, the program seems to make sense for the majority of CMB's partly as a result of your interest and feedback. I will do my best to keep you informed of any further action in that regard or other topics that will be of interest to us.


Finally, allow me to solicit some help to identify all CMB's in our group. Please review link here:

CMB's in Florida and email me ( with others not listed or missing contact information. I thank you for your dedication to our industry and look forward to open communication with each other going forward!


Best regards,

Michael Azzarello, CMB

Chair, CMB Society of Florida

 Uniform State Testing Advocacy Campaign 


The MBA of Florida is supporting Uniform State Testing (UST), which would allow a single test to be recognized as a satisfactory measure that the licensee knows the business and is aware of the ethical standards of the industry and allow licensees to lend in multiple states without the time and financial burden of taking multiple tests.  So far 36 state regulators in 33 states and also the District of Columbia have adopted the UST.  Florida is not one of those states.  We are what is referred to as an "island state".


So what are the pros and cons of the UST?  Some have argued that there would mean more competition in Florida if we adopted the UST, and that there would be fewer controls over the business practices of the out of state lenders. The level of Fraud in Florida has put our state near the tops of those charts nationwide for the past several years. Given this, it doesn't seem that our sterling reputation is in danger.  Additionally, simply adopting a uniform test will not curtail our state's efforts or abilities to enforce the multitude of regulations with which our industry complies.  It may increase the ease of doing mortgage business in Florida, but will also make it easier for Florida lenders to do business in other states.  Our conclusion as the association's leadership is that it comes down to whether competition is a good thing or a bad thing. 


A couple of years ago, we celebrated our success in stopping legislation that would require licensure for processors and underwriters. We felt that this was important in order to make our state a more competitive place in which to do business and encourage regional or national lenders to employ Floridians.  It would seem inconsistent to now take a position that would increase the barriers to entering the Florida mortgage market.


As the state's association, it is in our mission statement to promote the highest in ethical standards.  The definition of ethics can certainly be a matter of legal interpretation, but in the most basic understanding, we need to do the right thing for the right reasons. Taking a position that would create barriers to entry doesn't "feel" like it would be consistent with this standard however, promoting a campaign that is focused on making it easier to do business in our state and across state lines does. 


If you would be interested in contributing a viewpoint or opinion on legislative issues like this, please sign up for the Legislative committee: 

Click Here to Access the Committee Sign up. 

We would welcome your input.


Jay Ralstin

Legislative Chair and President Elect, MBAF

Becoming a Conscious Leader 
by Jane Mara
Provided by Kristina S. Holmen-Mohr, CMB, LTG, AMP 


Having intra-personal intelligence is the ability to understand oneself fully and to be able to use this capacity to operate effectively in the world. If we understand our essential human-ness, we can as a consequence understand other people and learn to become more effective leaders and managers.

Seven strategies to develop intra-personal intelligence:

  1.  Listen actively to other people! Learn to recognize what is said beneath the surface - listen for tonality and consistency of the content being communicated, whether spoken or written. Developing active listening skills provide clues to the true meaning of the communication.
  2.  Listen to yourself! Is your inner dialogue one of criticism, blame and guilt? Do you scare yourself with your thinking? Or is your inner dialogue one that supports your goals and objectives? Developing self awareness of our internal dialogue provides a platform to have more positive thinking.
  3.  Schedule active relaxation and stress reduction as a daily priority. You will have greater clarity and access to higher levels of creativity and intuition with this one step.
  4.  Delete the words: can't, don't and should from your vocabulary! All of these terms when added into a sentence create blame about a situation or person. Adopt personal responsibility for what has occurred.
  5.  Learn to be present in every situation - whether that is in a meeting or a conversation with another person- be aware of where you are, not where you are not! Too often we live in the past or the future taking little notice of present time which is the only time we have.
  6.  Listen to your intuition - senior executives rely more on their intuition as they progress up the corporate ladder. Your intuition is a reliable ally particularly in situations of rapid change where complexity and ambiguity exist.
  7.  Slow down - do you react or respond in a stressful situation? Reaction is fiery, uncontrolled, response is more measured.

Author Credits

Jane is an author, executive coach and mentor to senior business leaders and is well regarded as a facilitator and speaker. Her client list includes the following sectors: Education, Media, Arts and communications, Professional services, Financial Services, Health and Infrastructure. Her diverse experience in management and as a senior mentor to business leaders plus her highly intuitive nature provides her clients with unique perspectives for their business and personal growth. For further information please visit her website:

Send Us Your News

Remember to send us your news. Anything you would like to get out to our members or that would be of interest of an industry nature please forward it to
We welcome all submissions. 
Welcome to the MBA of Florida's Summer Newsletter.
President's Message, Alexander Castellanos
Alex Castellanos
Change is constant, what is not constant is how we adapt to it. Our industry has been changing since its inception. Some of the changes came by innovation, some by the market and some by legislation. Think back to when you started in the mortgage business, and look at how much has changed since that time. It does not matter if it was 1 year ago or 47 years ago, you have experienced change. As we are nearing the implementation of Qualified Mortgage in our industry along with many other requirements it has become apparent to me that the theme for this year should be
"Adapt to Achieve."


We as individuals, as companies, as an association and as consumers will need to adapt to the changes that are taking place. There will be many opportunities for those that adapt and understand how to conduct business in the new model. There also will be many unintended consequences that I won't begin to speculate as to what those may be, but will let time determine any fallout from these changes. We are not able to control a lot but we can control the attitude and manner in which we will embrace the change that is constantly happening.


I encourage everyone to invest in themselves and learn as much as they can about the career they have chosen. The Mortgage Bankers Association has a great designation called the Certified Mortgage Banker (CMB), along with the School of Mortgage Banking I, II and III. I have started on my journey to become a CMB and have attended The School of Mortgage Banking I. The contacts, insight and knowledge you gain on the journey of becoming a better mortgage banker are priceless.


Get involved in your local, state and national association.  None of the changes we see today and probably none of the future changes have been or will be engineered by just one person. One might say it is the collective strength of a group of people that have made the changes move forward. The people that are making the decisions many times try to listen to the different parties, however we need to voice our opinions and concerns to be heard. Speak up, write your politicians, join the Mortgage Action Alliance , comment on the proposed rules on the Consumer Financial Protection Bureau (CFPB) web site  

Make sure your voice is heard.


Let us give back to this industry which has given us so much. Take the time to mentor someone and bring them under your wing and show them the ropes. Encourage them to take as many courses as possible that the MBA offers. Educate them on what it takes to become a CMB so that they have a goal to achieve the designation. Invite someone to get involved in the Local, State and National MBA!


I am confident in the Mortgage Banking Industry and I do believe we have great days ahead.  I am convinced that we will, through our collective strength, adapt with the changes and continue to be trusted advisors to our clients. Our profession is a noble one and we have helped provide shelter for many families. When done correctly we all know it has a positive impact on the lives of our clients and our communities.


I thank you for your support and involvement. It is with our collective efforts that will ensure us to succeed. A special thanks to my family for their unwavering support and I especially want to thank my board members for the commitment to serve us all.


Enjoy the rest of your summer.


Alex Castellanos

President, MBA of Florida 


Association Work and Event Planning
The MBA of Florida has a busy year ahead. We've begun the process of updating our website. We continue to investigate the best social media avenue for our members, while currently using Linkedin, facebook, Twitter and Constant Contact
for communications, it seems folks are having information overload from many sources so we are still trying to find our best fit as not to have so much repetition. The 2014 "61st" Annual Convention will he held June 18th and 19th. We are still exploring the dates for the Eastern Secondary Market Conference but currently looking at the 2nd week of February. Locations are still being evaluated for both of these important events and we will let you know when confirmed. Legislative Day in Tallahassee looks like it will be March 19th in conjunction with the Florida Realtors. We continue to work with MBA in Washington to keep us aligned and informed with all that is going on statewide and nationally while bringing the most value and information to you as a member of MBA of Florida. You have been asked to join the Mortgage Action Alliance from Alex and also every newsletter we have the link available. With MAA you are automatically given information on any issues and will be directed straight to your specific legislative representative or senator if actions are needed. More information directly below. Join the MAA today! It's free and extremely important and valuable as we move forward with constant changes in laws and regulations. More info and the link below!
Mortgage Action Alliance
MAA Logo

The Mortgage Action Alliance (MAA) is a voluntary, non-partisan and free nationwide grassroots lobbying network of real estate finance industry professionals, affiliated with the Mortgage Bankers Association. MAA is dedicated to strengthening the industry's voice and lobbying power in Washington, DC and state capitals across America. Get involved with MAA to play an active role in how laws and regulations that affect the industry and consumers are created and carried out by lobbying and building relationships with policymakers. It only takes a moment to get started, and you do not have to be a member of MBA to enroll.  View the simple step-by-step overview of how to join and how to participate. 

Committee Sign Up - Come Join Us!

The Association Work and Event Planning article above we outlined some of the work we have planned for the upcoming year. This is where you come in. If you have not yet signed on for a committee there is still time. We have seven committees for which you can volunteer. They are listed below along with a link with the full descriptions. All committees meet via conference call and some are busier then others. Please email with your interest or if you have any questions.



BYLAWS (Co-Chairs)

Margie Fletcher

Dan Harrison



Carole Hendricks



John Cosculluela, CMB

Sandy Garcia



Pat Gaver



Jay Ralstin



Michael Azzarello, CMB

Kevin Strickland



Dana Cummins



Jay Ralstin

Dan Harrison


60th Annual Convention
60th Cake

The 60th Annual Convention was held June 19th and 20th at the TradeWinds Island Resort and Conference Center in St. Pete Beach, Florida. We have heard some great reports that overall everyone had a wonderful time. The hotel maybe wasn't exactly the best place for a convention because of the outdoor trek to get to the meeting space. I think we used a lot of "anti-frizz" hair products that week. We have heard that many folks plan to return for their down time or vacations. The speakers brought us the information needed to move us into the next phase of mortgage lending or motivate us to keep positive. We are working on upping the programs for the 2014 year. All ideas you have for speakers/programs/fun events are welcome. We are still accepting committee volunteers as noted in the above article.

On Wednesday evening we had the great opportunity to honor our past presidents with a presentation of the MBAF History Book, a commemorative 1953 Corvette and everyone joined us in honoring them with a champagne toast. Margie Fletcher did an outstanding job with the toast and Dan Harrison was extremely humbled to be the one to provide the presentations to our past presidents. Also we were so excited and happy to be able to welcome Joe Burnett who was our 18th president for the 1969-1970 year. Photo above with Dan Harrison.

wade BLW

And the Brown L. Whatley award winner is......... Wade Hamby! (Photo above.) "Yes, finally" everyone said!
About the award: The prestigious Brown L. Whatley Award is presented each year by the Mortgage Bankers Association of Florida. It recognizes the individual member who has made the most significant contribution to the advancement of the Association and the mortgage banking industry in Florida. From the beginning, it was the intention that the Award honor outstanding individual service rather than express appreciation for service in high elective office.

The Award represents a meaningful encouragement and incentive for participation by individual members in the Mortgage Bankers Association of Florida. Since 1955, the Brown L. Whatley Award has been presented annually to an outstanding member as an expression of appreciation by fellow members of the Association. By their distinguished accomplishments, the individuals receiving the Award add honor and prestige to the Award itself.


Congratulations Wade, well deserved recognition!

The Presidents Award went to Margie Fletcher. You would be hard pressed to find anyone that has put in so much time, effort and true commitment to the mortgage industry on a personal working level and as a volunteer to to local chapter (Tallahassee) and the state association. Margie has always been one of the first ones to step up for any challenge and has been on every committee but her love is the convention committee. Dan presented this award to Margie during the Annual Business Meeting and everyone completely felt his sincerely meaningful and from the heart message.

Lastly, you have seen just a couple of photos in this article but there are over 250 photos posted on the web site from this convention as well as many others throughout the years. If you have any pictures to add just email them to

Please go to this link: Visit our MBAF Picasa Albums online
Legislative Update
By Eric Prutsman, Esq.

It has been a quiet summer for the Legislature. No special sessions and no urgent crisis to require the Legislature to meet. House and Senate members are back in their home districts, finishing up family vacations before school starts in August. Committee meetings will restart in Tallahassee in September to mark the beginning of the 2013-2014 Legislative Session.


The September committee meetings will also bring candidate fundraisers back to Tallahassee as House and Senate members begin to work on their re-election campaigns. The Legislature amended the campaign finance law this past session to increase the contribution limit for state legislative candidates from $500 to $1,000 per candidate. Although there has been little media attention paid to the increase in the contribution limits, the change is certain to increase the pressure on contributors to raise the additional dollars that will be requested by candidates.


The MBAF will be working on a number of key issues this coming Session. Property insurance reform and property tax reform always are on the list, but expect to see other issues such as the Uniform State Testing (UST) as discussed elsewhere in this edition of the News and regulatory issues with the Office of Financial Regulation.   

Chapter News

The MBA of Florida has seven chapters around the state:



Central Florida

Tampa Bay

Gulf Coast

SW Florida

South Florida


Each chapter has it's own local activities and meetings throughout the year. Each has it's own charity or charities they support. Not only are they actively engaging in education and networking they also support the communities where they live. Many of the chapters are just having their planning meeting and gearing up their calendars for the year. We will have more information posted online soon so check back in the next couple of weeks. The calendar link is below. In the meantime here are some items of interest presented by a few of our chapters.


MBA of Central Florida

by Matthew Goldman

On April 18th, the Mortgage Bankers Association of Central Florida held its 2nd annual fund-raiser, at long time member, Ron Rawson's home to raise money to benefit Safe House of Seminole. The luau - themed event was supported by more than 40 MBA members and Affiliates. Over $1,500 was raised at the event and an MBA of Central Florida donated an additional $500 bringing the total cash contribution to$2,000. Other needed items were donated as well.


Safe House's mission is: Developing, promoting and enhancing creative prevention and effective intervention initiatives which will reduce the amount of violence in intimate relationships.

Bringing people together - in coalitions and committees - to build healthy families in Seminole County.


MBA of Jacksonville

by Randy Galloway

The Jacksonville MBA has changed our meeting days to the first Thursday of each month.  Our first Thursday meeting is August 1st at 8:30 AM until 10:00 AM with an awesome guest speaker, Steve Richman with his Sales Alchemy Presentation. On October 11th we are having our Inaugural Golf Tournament at Windsor Parke Golf Club.  Registration is at 8:00 AM and tee off at 9:00 AM.  We have had a lot of response and looking for a big turnout and a great time.


Mortgage Bankers Association of Tallahassee

By Brett Bosarge

In May our membership meeting featured an update on the pulse of the new construction market. The guest speakers were Shane Lambert, President of the Tallahassee Builders Association, and Paul Thompson, Executive Officer of the Tallahassee Builders Association and the Florida Home Builders Association. The newly elected Board of Directors was also installed at the membership meeting.


In June we had a large number of members attend the Diamond Anniversary Convention of the MBA of Florida in St. Pete. I was pleased to find out that our chapter had the largest attendance of all the chapters. The consensus of the convention was that it was productive and informative.


July our newly elected Board of Directors and new local Committee Volunteers met for our annual planning meeting. We discussed the individual roles for each person for the coming year. In addition, we mapped out a general outline for the topics of the membership meetings for the coming year. In August, the membership meeting will feature and underwriter panel consisting of two mortgage underwriters and one MI underwriter. Also, we plan to continue our annual Bowling Tournament and Silent Auction for MPAC. In addition how to implement an additional fundraiser was shared at the convention by Joe Adamaitis, Gulf Coast MBA President.  

Check out the Chapter Calendar of Events
 Visit the Local Chapters - Click the link to access their calendar of events.
(Please note we are updating the calendar as the chapters complete their planning meetings. Check back for updates.)
Future Leaders Needed

 We need NEW recruits for our "Future Leaders".  


Future Leaders Informational Brochure


Future Leaders Application 


For any questions please contact Pat Gaver, Chair, Future Leaders Committee at 
Legal Update: Florida Mortgage Bankers
by Steven vonBerg, J.D. 


Note: This article is excerpted from remarks of Andrea Lee Negroni (BuckleySandler LLP) and the author, at the 60th Annual Convention of the MBA of Florida on June 20, 2013. This is not legal advice to any person and is provided as a courtesy to the MBA of Florida and its members.



The regulatory compliance challenges facing financial institutions have never been higher. In 2012, the American Bankers Association said the regulatory burden for community banks had created a tipping point beyond which many banks cannot survive. Industry commenters say:

  • "There is literally not enough time in the day to read and interpret all of the newly issued regulations while keeping up with our daily compliance responsibilities."
  • "I spend more time on compliance than I do with clients ... No matter how hard you work or how smart and frugal you are, the regulations and reporting requirements are simply becoming too burdensome to operate a small business."

Among the topics Florida mortgage bankers must focus on now are the Qualified Mortgage Rule; mortgage banking law amendments; new court decisions; and a host of emerging issues, including the forthcoming regulation of social media and the pricing and placement of force-placed insurance. I'll review these in turn.

  1. The Qualified Mortgage (QM) Rule

The Qualified Mortgage Rule goes into effect in January 2014. Its safe harbors can minimize enforcement and litigation risk, incentivizing lenders to offer these loans. The QM Rule, which applies to closed-end loans secured by a home, requires lenders to make reasonable and good-faith determinations that a borrower has the ability to repay the loan.  Borrowers cannot be qualified based on temporarily low payments during interest-only periods or the front end of a short ARM.

Generally speaking, the Rule can be satisfied in two ways (exceptions are not addressed here). The first is by adhering to qualifying standards, also called the "Ability to Repay" option.  The second is to originate a "Qualified Mortgage." Of the two, the Ability to Repay option is more flexible. The Ability to Repay option requires the lender to consider several underwriting factors and verify underwriting information. These factors are: income or assets; borrower's employment status; the monthly loan payment (PITI); the monthly payment on simultaneous loans; the borrower's other debt; and his credit history. Although these factors must be considered, underwriting standards are neither mandated nor fixed.  For example, there is no maximum debt to income ratio for the Ability to Repay option, nor is there a minimum credit score. Underwriting departments retain the discretion to determine whether a borrower is an acceptable credit risk.

Lenders must verify underwriting information with written records provided by someone other than the borrower or the lender. These records include tax returns, W-2s, and bank statements, for example. (Third party verification of employment can be done by phone.) The lender may consider assets in lieu of income if that is reasonable. Only the income necessary to support a determination of repayment ability must be verified. If, for example, a borrower earns a base salary plus optional bonuses, and the lender reasonably determines that the base salary is sufficient to repay the loan, the bonuses need not be verified. The monthly payment for qualifying borrowers is the total of the principal, interest, taxes, and insurance, plus the principal and interest on any simultaneous 2nd trust loan, plus any required homeowners association or condo fees. Principal and interest payments must be calculated at the fully-indexed and fully-amortized rate. For ARMs, the payment must be calculated using the index that applies when the loan adjusts, plus the maximum margin applicable at any time during the loan. The Ability to Repay option doesn't restrict product features, limit points and fees, or prohibit ARMs or interest-only loans. It permits flexibility in underwriting leading to reasonable, good faith determinations of the borrower's ability to repay.

The Qualified Mortgage is the alternative to the Ability to Repay option. A QM loan can be considered a higher-priced loan, or not. In the interest of space, I address only those that are not. For a Qualified Mortgage that is not "higher-priced," a lender is presumed to have met the Ability to Repay standard regardless of whether the lender made a reasonable or good faith determination of the borrower's repayment ability. In essence, this is a safe harbor for QM loans. A Qualified Mortgage has limited product features, must meet one of two underwriting tests, and may not include excessive points and fees. Qualified Mortgages may not exceed 30 year terms and must have regular periodic payments that are substantially equal, except for ARM interest rate adjustments. They cannot have interest-only options, negative amortization, balloon payments, or deferred principal payments.

The QM underwriting test requires either meeting the standards of Fannie, Freddie or a government agency (FHA or VA), or compliance with specific detailed underwriting guidelines. The underwriting requirements run 20 pages, but the main point is that the borrower's income must be verified, all debts must be included and the total "back-end" debt to income ratio cannot exceed 43%. Points and fees are limited: for loans over $100,000, the cap is 3 points. Certain prepayment penalties count against the point and fee cap.

This is a very rudimentary summary of the QM Rule and you should review the detailed requirements in time to comply in January.

2. Florida Mortgage Lending: Legal Developments


Florida recently adopted several mortgage-related laws and participated in the state/federal $25 billion foreclosure/servicing settlement. Florida Attorney General Pam Bondi said financially troubled borrowers in the state will get $3.1 billion for loss mitigation, $309 million will go to homeowners with underwater mortgages and loan rates over 5.25% to enable them to refinance, and $171 million will go to borrowers who lost homes in foreclosure. Florida also expects to get $334 million to fund housing and foreclosure-prevention programs.


The settlement requires servicing process modifications by the largest mortgage servicers of privately held loans (Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo); these changes are expected to eventually cover other servicers too. The changes mandate: a single point of contact for homeowners; adequate staffing levels and staff training; higher standards for executing foreclosure documents to prevent robo-signing; reduction of excessive default-related fees; monitoring of lawyers and third parties involved in the foreclosure process; procedures to ensure accuracy of accounts and default fees; procedures to prevent neglect of bank-owned properties; restrictions on inappropriate force-placed insurance; review of modification applications to ensure they are handled expeditiously and fairly; and no dual tracking of foreclosures while modification is under review.

While these changes are being implemented, regulators continue to address loan modification complaints. The CFPB's database puts Florida in fifth place nationally on mortgage complaints per capita. In Florida, mortgage modification problems were the #1 source of consumer complaints to the Office of Financial Regulation in 2012. The OFR has responded with cease-and-desist orders and has levied fines against loan modification providers. Concurrently, the Florida legislature enacted laws regulating the mortgage modification business.

Florida law requires an individual or company that provides loan modification services to obtain a license from the OFR. This requirement enhances the 2008 Foreclosure Rescue Fraud Prevention Act, F.S. 501.1377, which prohibits up-front fees for loan modification services related to foreclosures. The foreclosure rescue fraud law restricts sale/rent-back contracts if the repurchase price is unconscionable. Unconscionability is presumed if the repurchase price exceeds 17% per annum of the amount paid by the purchaser to acquire the property.

The housing downturn resulted in a tsunami of Florida court decisions on foreclosures and related issues. Homeowners facing foreclosure, and their lawyers, can be creative. New legal defenses, such as the robo-signing defense, have been successful in Florida. Less familiar recent decisions deal with the standard for setting aside a foreclosure for inadequacy of sale price.

In CitiMortgage v. Synuria, 86 So.3d 1237 (Fla. App. 4 Dist., 2012), a trial court denied Citi's motion to vacate a foreclosure sale. Citi did not have an agent at the sale because it had substituted lawyers; it claimed "excusable neglect." Foreclosure of a $41,000 mortgage resulted in a sale for $800. The lender succeeded in setting aside the sale based on gross inadequacy of the sales price. The purpose of the law, said the court, is to "encourage good faith offers for foreclosed properties, [but] not to protect outrageous windfalls to buyers who make de minimis bids." But HSBC Bank v. Nixon, 2012 WL 6600927, came out differently. HSBC sought to vacate a sale in which its $787,473 judgment was lost to a buyer who paid $1,600 for the property. HSBC's attorney moved to withdraw and sought a continuance of sale date to allow the bank to get another lawyer. Unfortunately, the withdrawing lawyer didn't publish notice of the sale or set a hearing on his motion to withdraw. The court said HSBC never provided evidence to demonstrate a mistake that would entitle it to relief.

These seemingly contrary conclusions make it worthwhile to review the Florida Supreme Court's rule about inadequacy of price as a ground for setting aside a judicial sale, as set forth in Arlt v. Buchanan (190 So.2d 575, 1966):

The general rule is ... that standing alone mere inadequacy of price is not a ground for setting aside a judicial sale. But where the inadequacy is gross and is shown to result from any mistake, accident, surprise, fraud, misconduct or irregularity upon the part of either the purchaser or other person connected with the sale, with resulting injustice to the complaining party, equity will act to prevent the wrong result.

In Vargas v. Deutsche Bank, 104 So.3d 1156 (Fla. App. 3 Dist, 2012), the borrower challenged the foreclosure. Vargas borrowed $232,000 from First NLC Financial Services; the note was assigned to Deutsche Bank. After default, a foreclosure date was set and postponed. The servicer offered a written modification with an expiration date. Vargas didn't sign it; instead he asked the court to order a modification more to his liking. His request was denied and he filed bankruptcy, which automatically postponed the foreclosure. Eventually, Vargas asked the court to enforce the original (unsigned) modification offer. The Florida statute of frauds requires a debtor's action on a credit agreement to be supported by a written agreement. The Vargas decision holds that a promise to modify a mortgage is a credit agreement subject to the Florida statute of frauds. Therefore, an unsigned agreement can't be used to prevent foreclosure.

Homestead exemption claims come up frequently in Florida courts. In Grisolia v. Pfeffer, 77 So.3d 732 (Fla. App. 11/23/2011), a Florida appeals court considered the factors relevant to determination of homestead status. The decision holds that a person's failure to claim a homestead tax exemption is not evidence that the property is not his homestead. The homestead tax exemption, an exemption from taxes, is construed strictly against the homeowner, whereas the homestead exemption from forced sale is liberally construed in favor of the homeowner. Eligibility for the exemption from forced sale depends on the intent of the homesteader, and not on immigration or citizenship status. Florida law doesn't require the property owner who claims homestead to live in the property -- it is sufficient if his family lives in the property.

  1. Emerging Issues

Compliance in a changing regulatory world requires lenders to look down the road ahead as well as back into the rear view mirror. High on the emerging issues list are efforts to regulate social media use by financial institutions. The government is concerned about the risks created by social media, ranging from hacking and the posting of false information to data breaches and inadvertent disclosures of personal financial information. Legal regulation in this area is inevitable, especially for legal-centric transactions, such as mortgages.

In January 2013, the Federal Financial Institutions Examination Council (FFIEC) proposed guidance for financial institutions (FIs) using social media. The non-binding guidance says FIs should identify, measure, monitor and control the risk of social media use and ensure it is consistent with laws and regulations governing their business activities. Issues unresolved by the guidance, include, for example: How can loan officers tweet a Fair Housing logo or provide extensive disclosures in 140 characters? Will fair housing laws prevent credit advertising on blogs catering specifically to women, young people, or protected classes? Will anti-discrimination concerns (or effects-test considerations) lead to requirements for social media marketing in multiple languages? How can individuals' postings be monitored to ensure a lender's reputational risk is minimized? Consistent with Constitutional freedom of expression principles, can a lender prevent customers from posting financial data on social media feedback sites? Where will responsibility fall when hacking into these sites results in the inadvertent disclosure of confidential financial information? These and other questions are the tip of a potentially huge legal and regulatory iceberg for financial institutions.

Force-placed insurance is another area of emerging risk for the Florida mortgage industry. Consumer advocates claim borrowers suffer when lenders force-place hazard insurance. They also argue that lenders earn undisclosed commissions on the sale of the insurance, driving up the price. Groups such as the Consumer Federation of America and Center for Economic Justice are lobbying the Florida Insurance Commission to stop force-placed insurance "overcharges." In short, consumer advocates object to the way the product is offered and priced. Some government agencies may be inclined to agree.

In late March, the Federal Housing Finance Agency announced it would no longer allow insurers to pay commissions to lenders or servicers on GSE-owned loans. Almost simultaneously, New York's Department of Financial Services made a $14 million settlement with Assurant, barring it from paying commissions to banks, paying lenders sign-up bonuses, or offering low-priced flood insurance monitoring to attract business. The order also prohibits lenders from force-placing insurance through affiliated companies, and prohibits insurers from reinsuring a force-placed insurance risk with affiliated companies. Challenges to lender-placed insurance are cropping up in lawsuits across South Florida. In May 2013, a settlement for more than $19 million resolved homeowners' complaints that their force-placed insurance premiums unfairly hid commissions to the lender. Skirmishes in the battle over force-placed insurance are likely to continue and the industry may operate very differently in a year or two than it does today.


I end where I began. In the home loan industry, regulatory compliance grows more complex and more expensive with the passage of time. In troubled economic environments, practices that were previously thought benign generate scrutiny from consumers and regulators, along with demands for reform. As challenging as it is to implement procedures responsive to the increasing regulatory burden, a compliance-centric business approach is the best way to serve and satisfy customers, with the least legal risk.

About the Author:

Steven vonBerg is a 2013 graduate of the American University Washington College of Law where he was an Articles Editor on the American University Business Law Review.  Previously, he worked as a mortgage originator. He interned at the U.S. Securities and Exchange Commission, an antitrust litigation firm, and a boutique hedge fund advisory firm.  Mr. vonBerg has a special interest in emerging technology and its impact on the law.  He can be reached at


Florida Realtors Offer "Free Friday" to their Trade Expo on August 16th

Florida Realtors is again offering "Free Friday" - free admission to the Trade Expo on Friday, August 16 from 10 a.m. - 4 p.m. at Rosen Shingle Creek in Orlando. It's FREE if registration is made in advance - $10 if you register on-site.


Everyone who registers for "Free Friday" will receive one complimentary pass to an education session on Friday (does not include admittance to the General Session featuring the Property Brothers. Tickets for the general session can be purchased by Florida Realtors members for $35, non-members $50).


It is encouraged that individuals register in advance (free in advance - $10 on-site).  Not only will you save $, but you will save time standing in line at the registration desk.  Those who register in advance simply go to the pre-registration lines, give your last name and you will be given the registration packet. Based on previous years, those who wait to register on-site will be standing in the on-site line for awhile.


Here's how to take advantage of this fantastic "Free Friday" offer... just go to  It's that simple!


When you're on the convention website, check out the current list of exhibitors (the list is continually updated as vendor contracts are received).


This year's Thursday evening entertainment session "A Night in Chicago" will feature Brass Transit - the ultimate Chicago Tribute Band.  Imagine the raw power and excitement of a world-class horn section, an electric guitar virtuoso, a rhythm section so hot you just CAN'T sit still, and vocal performances that will transport you to another time and place. Join us as Brass Transit delivers the ultimate Chicago experience. Rock out to "25 or 6 to 4." Spend "Saturday In the Park." And answer the musical question, "Does Anybody Really Know What Time It Is?"  The band includes veterans of Hall-of-Fame rock and soul acts like the Drifters, Sam and Dave, Aretha Franklin, Frankie Valli, Del Shannon, and the Mamas and the Papas.


As mentioned above, the Property Brothers will be featured at Friday's General Session.  HGTV Stars "The Property Brothers" Realtor Drew and Contractor Jonathan will share stories of life in front of (and behind) the camera on their two hit TV shows. Tickets for the general session can be purchased by Florida Realtors members for $35, non-members $50.

Since 1952, the Mortgage Bankers Association of Florida (MBAF) has integrated the state's diverse real estate finance industry into a unified service organization.  The MBAF is committed to promoting sound and ethical business practices in the mortgage banking industry; providing a powerful and responsible presence in Florida's legislative arena; educating its members in the most up-to-date practices and methods, so members can grow and mature in their careers; serving as a forum for communication and social interaction among peers; and adapting to change in a mercurial business environment, in order to help mortgage bankers succeed in that environment.

Thank You for Reading our Newsletter! 

Brenda Thomas
Mortgage Bankers Association of Florida