Considering Loss Mitigation As A Career?

In the past couple of years foreclosures have become a hot issue within the real estate market and are definitely a business opportunity worth considering. Even with the growing numbers of foreclosures on the market today, there are really only two areas where a business opportunity exists. One is helping people who find themselves in severe financial difficulty due to their mortgage being worth more than the actual value of their home. This type of market is called the "Short Sale Market" and is hard to break into especially if you lack previous mortgage or real estate experience. The other is helping people who need to save their homes from foreclosure and stay. This is called Loss Mitigation and is an ideal entry business level opportunity.

So what exactly is Loss Mitigation? To put it in simple terms it's where an impartial third party negotiates with the lender on behalf of the homeowner to stop the foreclosure process. The Loss mitigation expert will bring together the two parties and arrange a viable repayment solution that is acceptable to both the homeowner and lender. This process is very successful because neither party wants to lose possibly thousands of dollars. The Loss Mitigation expert has no emotional involvement in the deal and works only on facts and figures and because of this they will achieve more than a homeowner. Another point to consider is the negotiator will know in detail all the programs offered by lenders and the criteria they work to.

When looking at Loss Mitigation as a business enterprise, there are some points to consider. Initially you should try and forge an association with your business and a reputable company that can provide this type of service for your clients. This type of company would be similar to an outsourcing company. Using a company that already has connections in the business and provides an effective service will be beneficial to yourself and your clients.

Firstly this company will have a good knowledge of the ever changing rules within the industry. Lenders are constantly changing their rules and the solutions they offer due to the increasing number of foreclosures. A company that already has a network of lenders in place and knows exactly what each one can offer will provide a better service to your clients than you can when your business is still in its initial stages. You should remember you are working with clients whose homes are at risk of foreclosure. It is prudent at this early stage of your business not to put yourself directly at risk. You don't yet have the knowledge and experience, so using an already established company is an ideal solution.

Credibility is also another reason for using an outsourcing company. Using a company that has been in the marketplace for a number of years and has a good reputation makes good business sense. Since the number of foreclosures increased dramatically a couple of years ago, many new companies sprung up to cash in on the surge in the market. You should carefully research the background of any company you intend to become involved with and choose one that's been around prior to the upturn in the market in 2005. This should give you and your client's piece of mind that you are dealing with a credible company.

You should also look for a company that has a history of getting the deals done in the best interest of the clients. Look for a company that has recorded testimonials from satisfied clients. It costs a lot more money to produce an audio testimonial than just a few written words on a website. While this is still no guarantee that the testimonials are indeed real, it does give more credibility to the testimonials as even false ones are very costly to produce.

You should also take into consideration the matter of liability. Not all companies work in the same way, so research this aspect thoroughly before committing to any association. Some companies may ask you to set up escrow or trust accounts, some may even ask you to set up an LCC. The reason for this is they will want you to collect client's fees. If you wan to avoid having any liability then you want to find a company that will collect the fees directly from the client. You will also have to make sure the clients are signing contracts with the company as the main service provider. If you ensure these two points are being followed, then you will only be an independent contractor for that company and they will be liable as the contracted service provider if anything were to go wrong.

There are still several things to consider like the support structure of the company, the personability of the staff, the web presence, training provided, marketing and ultimate tools they will give you to help get you going. Any company that is evenly remotely legitimate will charge between $1,500 and $3,500 to get you started. This is expected and is very reasonable if you are selecting the right company for you and your clients.

Let's go over once more all the points we've covered so far if you're thinking about a career in Loss Mitigation. You will need to find an outsourcing company that will provide a quality service at an affordable price for your clients. The company should provide you with training, and support and services for both you and your clients. They should take care of all the contracts, handle the appropriate paperwork and collect all fees. They should also have a proven track record in the business. These are all important features to look out for as they will be beneficial in helping you in your new business as well as helping your clients.

Loss Mitigation can be a rewarding business both in personal and monetary terms, but a good amount of research must be undertaken before deciding to set up such a venture, not only for your own benefit but also for the families you will be helping.

I have researched many of the companies that are out there offering Loss Mitigation services and the only one I have so far found that meets all the requirements outlined in this article is Freedom Foreclosure Prevention Services. You can learn more about this vibrant, expanding company at their corporate website.



Freedom Foreclosure Prevention Service's Loss Mitigation Consultant, Bill Cobb, is the author of this article. Be sure to visit Bill's Blog at Loss Mitigation Without Lender Mediation Career