All your clients, including the successfully modified ones, the unsuccessful ones, and the ones you turn down before even starting, are sources of additional income for your business. First of all, you can refer all of them to a credit repair company. There are several good ones out there, some local, some national, all easily found on any search engine. Try to get a referral fee from them, if that is allowed in your state.
Similarly, you may be able to receive a referral fee for clients you refer to credit card consolidation and counseling companies. If a client has a lot of debt, or is considering bankruptcy, you may want to consider referring him or her to a debt consolidation and counseling company. Likewise, you may be able to receive a referral fee from a bankruptcy attorney, if your client is considering that option, or if you think he or she needs to consider it because of too much debt.
If you come across self-employed clients or entrepreneurs, you should find out if they have a good bookkeeper/accountant. Then refer your clients to the bookkeeper/accountant that you are using (don’t even consider being self-employed or a small business entrepreneur without outsourcing your bookkeeping and accounting, that is, unless you are specifically trained as a professional bookkeeper and accountant, and even then, I’d still probably outsource it). Try to negotiate some sort of monetary value for trade if you want. In other words, for every client you refer to your accountant, he or she will knock, say, $100 off your bill. You could end up with free bookkeeping, and possibly even free tax return preparation for your business if you refer enough people.
More important than all those referral revenue opportunities is the relationship you will build with one or two real estate brokers who focus on short sales. Many, many of your clients either are not good candidates for a modification, didn’t qualify for the modification you tried to get them, or ended up back in financial trouble shortly after the modification anyway. Therefore, you will want to refer nearly all of your clients to a short sale specialist. Many real estate brokers will pay upwards of 25% or more of the commissions they collect upon the successful close of a short sale. Since many brokers earn 2-3% of the sales price or more upon sale, and the average American home price is about $200,000, it doesn’t take a math genius to see the potential for additional income from referring your modification clients to short sales specialists.
The only reason I could see for not doing this is because you are a real estate broker or agent yourself, and you plan to take the short sale as your own listing. If this is the case, then kudos to you, as you’re smack in the middle of two booming industries and have found a way to earn commissions from one client in two different ways. Selling short sale properties is such a profitable business right now, you may even want to consider getting your real estate license just so you can do both.
The work you do for a loan modification is practically the same work you would do for a short sale, so you might as well do both. That said, getting a 25% referral fee or whatever for not doing a thing other than having a single conversation with your client is a pretty wonderful way to make to make a living. Just make sure that you are legally allowed to receive a referral fee from a real estate broker in your state, as every state’s laws vary greatly on the issue of referral fees to and from real estate brokers, mortgage brokers, and other professionals.
