Loan Modification Opportunity

I got an interesting inquiry recently. A group of unemployed mortgage brokers and a lawyer were planning to form their own loan modification firm, a timely way for them to take advantage of layoffs. In short, the mortgage brokers recognize that the skills they have acquired in the negotiation and selling of mortgages are highly transferrable to the business of renegotiating them. For them, one door closed and another opened.

The question they posed to me was how they can launch their own loan modification company. My suggestions were:

• Find out if they must be licensed in their state and, if so, how.
• Research what loan modification firms are charging in their area.
• Find local banks with large portfolios of problem loans.
• Negotiate with these banks to handle their loan renegotiations.

Do you have any other ideas? Better yet, do you have expertise in this function? If so, we'd like your comments in the forum on how these entrepreneurs should proceed.