How to Make Money With Loan Modification

Loan officers are often paid for modifying loans for their existing borrowers.

Loan modification involves a lender restructuring terms on an existing mortgage instead of foreclosing or making a new loan. For mortgage brokers and lenders, loan modification can be a source of income. Many wholesale investors and servicers will pay loan officers a fee for each loan modification they send them. While fees are sometimes nominal, the work involved in setting up loan modifications is often minimal. Thus, a loan officer can do a significant number of modifications in a short period of time, which can be profitable.

Things You'll Need

• List of wholesale lender guidelines

Instructions

1. Contact each of your lenders, especially HUD, and ask a representative for a copy of his loan modification guidelines. These guidelines will include a list of available loan terms and commissions available to you for each existing borrower you send them. If you work for a bank, these guidelines will come from your corporate underwriting or foreclosure avoidance department.

2. Make a list of your current borrowers who may benefit by modifying their current loan. Send each an e-mail or handwritten letter explaining the benefits of restructuring their current loans by lowering their rate or payment. Follow each mailing up with a phone call.

3. Examine your profitability. Some loan modifications can be done within a matter of minutes and can come with a minimal paperwork. Fit as many appointments in your day as time allows.

Tips & Warnings

• Always be aware of the status of each file. Some lenders are backlogged with modification applications, which can delay the process.

References

• 1st Step Mortgage Group

Resources

• HUD Loan Modification Information