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Starting a Loss Mitigation Business

Foreclosures are currently at an all time high and with the trend looking set to continue it offers an opportunity to get involved at a business level in the real estate market. There are two aspects of the market that you can realistically get involved in. The first option is the Short Sale Market, where a borrower has a mortgage that is worth more than the value of their property and need to sell to cut their losses. This market is mainly for investors and is extremely difficult to enter into unless you have some previous experience in the real estate or mortgage business. The second more appealing business option is Loss Mitigation. This is aimed at helping homeowners save their homes from foreclosure while still being able to stay in the property.

This is referred to as Loss Mitigation. Loss Mitigation is a technique whereby a third party will work with a lender of the particular homeowner or client and negotiate a more affordable deal for the homeowner than what they could have hoped to accomplish on their own. There are a couple of reasons why this service works. First and foremost, a professional does not respond with emotion but rather facts and figures and will get much more accomplished than the average homeowner just on that premise alone. The other is the knowledge of all the different programs available by each and every lender and all of the lenders' qualifying criteria.

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.

The first reason behind this is the knowledge in this ever changing industry that the company you select should possess. Right now lenders are changing their rules on a regular basis with the increasing foreclosures and the increasing programs and solutions available. A company that has this knowledge and these connections already in place will serve your clients much better than you could at the infancy stage of this business. Remember that you are working with clients that are facing foreclosure and their home is at stake. This is not a risk you want to put yourself on the front lines of without the full knowledge and experience.

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.

So to recap what we have covered when looking into the Loss Mitigation field you will want to find a company that can provide training, support and services for your clients. You want to find a company that is affordable to your clients and can provide quality services. The company you select should have a proven track record and handle the collection of fees and service providing including the contracting and paperwork. Remember all of these very important tips as each one can be crucial in the process of business and helping families.

This can be a very profitable business, but you should research the options available to you thoroughly before making any decisions. Doing so will be in your best interest and will also benefit the families you are helping.

The only company I have found that fulfills all of the requirements above is Freedom Foreclosure Prevention Services. Learn more about this dynamic, growing company at their corporate website.

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William has more than just one interesting website- checkout his FFPS Webinar and also his blog Loss Mitigation Without Lender Mediation Career This article is available as a unique content article with free reprint rights.

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