How to Start a Loan Modification Business

Homeowners struggling to pay their mortgage loans because they have suffered a serious financial setback often turn to their mortgage companies for assistance. Usually, they ask for a mortgage loan modification, in which their lenders or banks will reduce the principal balance they owe, slash their interest rates or somehow restructure the terms of their mortgage loan so that their monthly payments are more affordable. Homeowners can do all of this on their own, but many would rather work with a professional who can guide them through the process. To start a loan modification business, you will need to find these homeowners.

Difficulty: Challenging

Things You'll Need:
Background in real estate, real estate law or mortgage financing
Client list
Determine if you have the background to operate your own loan modification business. To provide a true service, you need to know how mortgage loans are originated and processed. If you have worked as a real estate attorney or mortgage loan officer or processor, for instance, you have the appropriate background. Working as a real estate agent, a career in which people spend a significant amount of time dealing with mortgage lenders and loan officers, can also qualify you.
Decide what types of services you will offer. Remember, consumers can approach their lenders on their own to ask for loan modifications. Your job will be to help them prove that their financial situations are dire enough to warrant a loan modification. You can offer to help homeowners write effective hardship letters. You may talk them through the steps involved in seeking a modification, or you may help them determine exactly what evidence they need to prove their financial distress to their banks or lenders. You can even offer to write scripts that homeowners can refer to when they call their lenders.
Decide how much you will charge. The clients you work with are already struggling financially. This may impact how much you will charge. Homeowners are not likely to spend big money on a service that they can do on their own. They may, though, be willing to spend a lesser amount of money for professional advice that can help their modification request be a successful one.
Build a website advertising your services. Many homeowners search the Internet for modification assistance, so you'll need an online presence. Make sure your site explains clearly what services you offer, what rates you charge and how homeowners can contact you.
Market yourself by encouraging your existing clients, whether you are a mortgage loan officer, real estate attorney or real estate agent, to mention your name to any friends or coworkers who they know are struggling to pay their mortgage loans.

Tips & Warnings:-

Be sure that you offer a legitimate service. Many entrepreneurs have entered the loan modification business as a way to make quick money off of stressed homeowners. You can face legal charges if you take money from consumers without providing them a true service.


Sign on San Diego: Loan Modification Business Booming Beware the Loan Modification Merry-Go-Round