To become a foreclosure consultant, obtain a government license or become a lawyer. Requirements include pre-licensing training, bonding, paying fees, and passing an exam. Consultants help families stop or delay foreclosure proceedings, negotiate settlements, and reverse defaults. They cannot handle loan modifications, bankruptcy filings, or acquire ownership of properties being foreclosed on.
Become a foreclosure consultant by applying for a government license or becoming a lawyer. Professional requirements vary around the world, but most governments require foreclosure consultants to register with a department of justice or attorney general after receiving training requirements. In the US, most states have passed legislation requiring any specialist advising families at risk of losing their homes to foreclosure to obtain a special foreclosure consultant license granted by the local attorney general’s office. Lawyers with a valid license to practice law are typically exempt.
There are two possible types of licensing. A person who wants to become a closing consultant for an established agency would need to obtain an associate’s license, also known as an agent’s license. Someone wanting to establish their own sole proprietorship or foreclosure consulting business would need an independent license.
The required application process to become a closing consultant includes pre-licensing training, bonding and paying licensing fees. It also includes submitting a completed application that includes business details, background and other qualifications such as home loan or mortgage experience. Often, a licensing exam is required. After receiving a license, the foreclosure consultant would register with the local government and start practicing. Licenses usually expire after one year and must be renewed annually, usually after completing continuing education.
Pre-licensing education includes approximately 15-25 hours of online or in-person instruction as specified by local attorneys general. Typically, 15% of training covers professional ethics, as in the past some consumer groups have accused foreclosure consultants of hunting families and defrauding them. Most governments, therefore, have taken steps to ensure that consultants are trained in how to be fair and protect the interests of landlords. Approximately 30% of pre-licensing training addresses mortgage lending laws at all levels of government. This area of study includes an analysis of all the special national programs created to help homeowners at risk of foreclosure.
The remaining classes focus specifically on the regulations and requirements of the local neighborhood where the candidate would practice if successful in the quest to become a Foreclosure Consultant. Special emphasis is placed on taxes, interest, and other ways that homeowners may be financially affected by foreclosure or remedies to avoid foreclosure. If not completed prior to submitting an application to become a Closing Consultant, all classes must normally be completed within three months of applying.
Other requirements for becoming a foreclosure consultant include submitting an annual financial statement prepared by a certified government accountant and setting up a trust account to hold any monies transferred between clients and creditors. Those with independent foreclosure consultant licenses generally must review associate and employee actions quarterly. Independent licensees must also obtain a title for their services in amounts generally ranging from $75,000 to $100,000 (dollars).
Many hopefuls feel that becoming a foreclosure consultant can be a rewarding way to help society, as these professionals guide families who are struggling financially. A foreclosure consultant’s job description includes tasks such as helping families stop or delay foreclosure proceedings, as well as reducing the impact of a foreclosure on a client’s credit report. Foreclosure consultants also negotiate settlements between landlords and banks, saving money to be paid into an escrow account. If homeowners have defaulted on loans, a consultant can also help reverse defaults and look for new loans.
Often, governments prohibit foreclosure consultants from handling loan modifications and bankruptcy filings for clients. Consultants also cannot acquire ownership, even partially, of properties being foreclosed on. Closing consultants are also often prohibited from acting as financial management consultants.
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