I UNDERSTAND THAT EVERYONE HAS THE RIGHT TO MAKE A BUCK, especially in this economy. But some of you out there (and you know who you are) need to be exposed for the greedy way in which you handle your business. I’m referring to a few companies that cater to homeowners by “helping” them get out of foreclosure. The correct name for this business is Loss Mitigation, and this business model has been sprouting up all over the US, following and feeding off of the housing crisis. Most of the Loss Mit companies out there are have been started by ex mortgage or ex collection people, who have a very good grip on the concept of extracting money out of homeowners. The standard fee for a Loss Mit company to take your case can range from $1,500 up to $3,500.

HERE’S HOW THE BUSINESS MODEL WORKS; The Loss Mit company will advertise to homeowners who are in an active foreclosure, or anyone who is at least 90 days late on their mortgage. The methods of advertising are usually online or by direct mail. The homeowner responds to the ad by calling the company, and immediately speaks to a salesperson. Notice how I did not use the word counselor, or specialist, I said salesman because almost everyone in the Loss Mit field works on a commission basis. As much as would like to report differently, there are very few bleeding hearts out there who will man the phones and help homeowners get out of foreclosure for free.

THE SALESPERSON TAKES SOME VITAL STATISTICS OF THE HOMEOWNER, and then pitches the product; For $2,000 we will fill out the correct forms, gather all of the important paperwork and contact your bank to negotiate a Loan Modification for you. I have seen fees based on size of the mortgage payment, size of the unpaid balance, or just a flat fee for all who apply. Some cases are tougher than others, but the time a Loss Mit company puts into each file ranges from 4 hrs and 10 hours of actual working time. Not bad work if you can get it huh?

IN FACT, I JUST HAD AN OWNER OF A LOSS MIT company here in Maryland call me to see if I wanted to come work for him. I asked him what his pay plan was and this is what he told me: I would be on 100% commission, I would need to charge at least $1,500 and anything I charge above that, I can keep. He said that most of his salespeople charge $2,200 earning them $700 per closed file. He went on to say that I could make at least $300k in my sleep working for him. If that doesn’t give you the willies, nothing will.

SO HOW DO I KNOW ALL OF THIS JUICY INFORMATION? I know this because I have a few years in the foreclosure rescue business myself, but I’m a bit different than my colleagues. I’m frowned upon because I am viewed as the idiot who is giving away the store when he could be making a killing in this horrible market. I just don’t believe in charging people thousands of dollars in UP FRONT fees with NO guarantees, for a service they desperately need. The homeowner is in a horrible spot, and highway robbery is not the answer. They need that money to get back on their feet and some much needed necessities. I also feel that the average homeowner is smart enough to handle the job of dismissing their foreclosure by themselves, but only if they are armed with the proper information.

THE BOTTOM LINE IS: no one is going to care as much about your foreclosure as you do, NO ONE will work on your behalf for free and you don’t have the time to wait for the government to step in and save you. So you need to handle this yourself.

You’ve probably started to notice that traditional rules and etiquette have been replaced with greed and ruthlessness in the banking industry… but sometimes desperate situations call for desperate measures.

If you’re ALWAYS following conventional rules & you’re uncomfortable thinking outside of the box, then you need to get over that frame of mind - right now.