There is also a business opportunity in this environment of increasing defaults and foreclosures. Foreclosure prevention programs and debt collection are emerging business opportunities in this scenario.
Foreclosure prevention programs give those homeowners facing foreclosure an opportunity to save their greatest investment-their homes. Naturally, most homeowners facing foreclosure genuinely want to pay their mortgages and continue to stay in their homes. Lenders taking the stance that they are in the lending business and not in debt collection can accommodate such homeowners by accepting delayed payments with late fees, legal fees, and other charges. Offering foreclosure prevention programs is a good business opportunity as it creates a win-win situation for all the stakeholders-borrowers, lenders, foreclosure prevention agencies, and debt collection agencies.
- Borrowers save their homes from foreclosure and the personal credit ratings of borrowers are spared from having a foreclosure on record.
- Lenders save on the costs of filing lawsuits to collect on delinquencies. Lenders are in the lending business, not the real estate business. Lenders would like to collect the money they lend, not the property. Additionally, foreclosure prevention agencies allow lenders to avoid the costs associated with taking possession of a property.
- Foreclosure prevention agencies earn a fee while helping homeowners to save their biggest investments.
- Debt collection agencies and Mortgage servicing firms get more business and generate jobs for mortgage lenders and brokers. With the rising cost of collecting debt, the lenders outsource this activity to low-cost collectors.
Debt collection agencies and mortgage servicing firms will do brisk business with losses in the sub-prime mortgage market. This will generate jobs for mortgage brokers and lenders who were laid off in the recent sub-prime mortgage meltdown.
