How Do I Become a Foreclosure Consultant?

Synthia L. Rose

Become a foreclosure consultant by applying for a government license or by becoming an attorney. Professional requirements vary around the world, but most governments require foreclosure consultants to register with a department of justice or attorney general after undergoing training requirements. In the U.S., most states have enacted legislation requiring any expert advising families in danger of losing their homes to foreclosure to procure a special foreclosure consultant’s license granted by the local attorney general’s office. Lawyers with a valid license to practice law are typically exempt.

Homeowners may receive cash for vacating their foreclosed home.
Homeowners may receive cash for vacating their foreclosed home.

There are two types of licensure possible. A person wanting to become a foreclosure consultant for an established agency would need to obtain an associate’s license, otherwise known as an agent’s license. Someone wanting to establish his or her own foreclosure consultancy business or sole proprietorship would need an independent license.

Foreclosure consultants must be licensed by the government or a practicing attorney.
Foreclosure consultants must be licensed by the government or a practicing attorney.

The application process required to become a foreclosure consultant includes undergoing pre-licensing training, becoming bonded and paying licensing fees. It also includes submitting a completed application that includes business details, background, and any other qualifications, such as experience in real estate or mortgage lending. Often, a licensing exam is required. After receiving a license, the foreclosure consultant would then register with a local government and begin practicing. Licenses typically expire after one year and must be renewed at a fee on an annual basis, usually after completing continuing education.

Pre-licensing education includes roughly 15 to 25 hours of online or in-person instruction, as specified by local attorneys general. Usually 15 percent of training covers professional ethics, since in the past, some consumer groups have accused foreclosure consultants of preying on families and defrauding them. Most governments have, therefore, taken measures to ensure that consultants are trained in how to be fair and protect the interests of homeowners. Roughly, 30 percent of pre-licensing training tackles mortgage lending laws at all levels of government. This area of study includes a look at any special national programs designed to help homeowners in danger of foreclosure.

Remaining classes focus specifically on regulations and requirements in the local vicinity where the applicant would practice if successful in the quest to become a foreclosure consultant. Special emphasis is paid to taxes, interest, and other ways homeowners can be affected financially by foreclosure itself or by remedies to sidestep foreclosure. If not completed before filing an application to become a foreclosure consultant, all classes must be completed usually within three months of applying.

Other requirements to become a foreclosure consultant include submitting a yearly financial statement prepared by a certified accountant to the government and setting up a trust account to hold any monies being transferred between clients and lenders. Those with independent foreclosure consultant licenses must usually review actions of associates and employees quarterly. Independent licensees must also obtain a bond for their services in amounts usually ranging from $75,000 to $100,000 US Dollars (USD).

Many aspirants feel becoming a foreclosure consultant can be a fulfilling way to help society since these professionals guide families who are in a financial bind. The job description for a foreclosure consultant includes such duties as helping families halt or delay foreclosure proceedings as well as reducing the impact of a foreclosure on a client’s credit report. Foreclosure consultants also negotiate agreements between homeowners and banks, saving any money to be paid in a trust account. If homeowners have defaulted on loans, a consultant can also help reverse defaults and seek out new loans.

Often, governments ban foreclosure consultants from handling loan modifications and bankruptcy filings for clients. Consultants also can't acquire ownership, even partially, of real estate being foreclosed. Foreclosure consultants are also typically banned from acting as financial management counselors.

Foreclosure consultants often undergo a fairly lengthy raining process.
Foreclosure consultants often undergo a fairly lengthy raining process.

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