Loss Mitigation

[bobs1769]

What is the name of your state? Rhode Island

I am seeking advice on Loss Mitigation/Foreclosure Intervention. I was considering this as a side business and possibly moving to a full time business if it takes off. I know that this can be done by the home owner for free, but the way I view it is, its like using your knowledge to provide a service to customers that they don't know about or don't care to do on their own. With the way the real estate market took off, practically anyone could get a mortgage to buy a home. Combine that with how easy it is today to bury yourself in credit card debt quickly (I know because I was there and cleaned that up quickly) many people are upside down in debt with no way to afford their home. I know that HUD housing has free services for their homeowners, but there's nothing for VA, FHA Fannie Mae and other programs out there for borrowers of these programs.

I struggle with a couple of things that I need help with which is why I am here.

Here are my questions for all of you to help me with...

1. Does Loss Mitigation/Foreclosure Intervention work for people? Is the financial institutions/mortgage companies willing to go this route rather than just foreclose on the property and sell it off?
2. Is it legal to represent or represent a client/customer that seeks your service to try and save their home and keep them from foreclosure? Do you need to be a real estate attorney or real estate agent to do this? Will the banks or mortgage companies deal with me as a client rep should they sign a form that I am their representative?

3. Can I be sued for not saving someone's home if I do not charge them a fee? I would only charge the fee if I was successful. I guess what are the legal ramifications I would face?

BTW, I would be bonded/insured if I did do this business.....

4. I found a loss mitigation program that cost $500 for their training program. Does anyone know if there are any state certified programs in Loss Mitigation or Foreclosure Intervention? I found on state certified programs in Ohio and Indiana.

5. Do most lawyers want to do Loss Mitigation or just file the Bankruptcy paperwork and not bother with the other stuff as they will probably make more money with less hassle?

Any help with my questions and additional information that you can provide would be greatly appreciated.

Thank you for you time...[url]http://forum.freeadvice.com/newthread.php?do=newthread&f=107#[/url]
Smilie

[HUD-1]

I think your business model needs a slight adjustment. Instead of the homeowenrs being your clients, i think the lenders should be your clients. Charge them on a per case basis. Your most likely clients are lenders who have a small inventory of FHA loans, for example. Rather than hiring someone to meet their Loss Mit obligations, they subcontract with you. They give you the listing of defaulted clients to work with. You get the homeowners in for an interview and set them on a path to get current with the loss mit tools, if possible. You then make a recommendation to the lender and collect a fee once the loss mit action is approved. There are too many excellent, free, non-profit housing counseling agencies out there for you to compete with. And how would you ever collect from a defaulted homebuyer? Its like getting blood from a stone.

1. yes. yes. (in fact lenders must offer loss mit for FHA loans or face treble damages)

2. yes. no. yes. Non-profit housing counselors do it all the time.

3. people can sue anyone for anything. wheter they prevail depends upon the facts of the case.

4. dont know

5. a lawyer should do what is in the best interest of the client.

[bobs1769]

Thank you for the excellent advice... I didn't think of Loss Mitigation in the manner that you suggested. I will get started on contacting some lenders and see if they are interested. I appreciate the advice and hopefully this will work.

Thanks again.


Bob