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.

Another reason for using an outsourcing company is their credibility in the marketplace. When searching for a company that offers Loss Mitigation services there are some things you should consider. Since 2005 there has been a dramatic increase in foreclosures and many companies were formed who saw this as a way to make a quick profit. You should therefore look for companies who have been established for a few years prior to 2005. These companies haven’t jumped on the bandwagon and were formed only to help and look after the interests of the families and homeowners who face foreclosure.

The third point to look for in a company is a proven track record in brokering deals and reaching successful solutions in warding off foreclosures. Look for a company that can provide recorded testimonials from satisfied clients. Although it’s possible some testimonials may be false, it’s far more costly to produce an audio testimonial than a written one and the likelihood of the clients statements being true are much higher.

The most important thing to consider is liability. It is important you research this aspect of prospective associate companies thoroughly. Most companies will ask you to set up trust or escrow accounts. Some may even ask that you set up an LLC. They ask you to do this because you will be collecting fees from clients. If you want to avoid liability you should choose a company that collects their fees directly from the client. You should also ensure they are getting clients to sign contracts stating they are the service provider. This means you would be working as an independent contractor for that company and any liability would be theirs if something did go wrong.

You should also take into consideration other things like the support infrastructure of the company, marketing, web presence, any training they provide and what tools they will provide you to get started. You will have to work very closely with this company so make sure you are happy that you will be able to forge a working relationship with them and that there are no clashes of personality. Companies will charge you a fee to get you started and these come in the region of between $1500 -$3000, which is quite reasonable if you’ve chosen the right company for you and your clients. If they charge a fee that is considerably more or less than this they are probably not legitimate.

So let’s look again at the points you will want to cover if you’re thinking of starting a Loss Mitigation Business. You should find a company that provides you with training and support provides an affordable and quality service to your clients and has a proven track record. Your chosen company should also collect all the fees and provide contracts and paperwork.

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.

A company that I have found that meets all the above criteria is Freedom Foreclosure Prevention Services. You can find out more details about this fast growing, go-ahead company at their corporate website.