How to Become a Foreclosure Specialist – A Complete Guide

There are so many career paths within the real estate industry. 

If you want to specialize in the foreclosure field, then you can become a foreclosure specialist. 

How? 

Today, we’re going to show you how to become a foreclosure specialist. 

To do that, we’ll answer the following questions: 

• What is a foreclosure specialist and what do they do?
• How do you become a foreclosure specialist?
• How much do foreclosure specialists earn?
• What are the skills needed for a foreclosure specialist?
• And much more!

We have a lot to tackle, so let’s get started.

What is a Foreclosure Specialist and What Do They Do?

A foreclosure specialist is a professional who oversees different transactions and processes of a foreclosure. 

They work together and/or on behalf of the seller (who repossessed the foreclosed property and wants to sell it) or the buyer (who wishes to purchase the foreclosed property).

As a foreclosure specialist, you are expected to do the following:

• Manage the foreclosure processes to make sure it fulfills all requirements and regulations of the local government, the state, and the federation.

• Prepares, organizes, and keeps all necessary foreclosure forms and documents.

• Collects and verifies the signatures needed and included on all foreclosure forms.

• Works with the homeowners, buyers, and other relevant parties to double-check and fix discrepancies in the document.

• Reviews essential documents such as insurance policies, appraisals, and liens.

• Files the required paperwork.

• Communicates and works closely with buyers, sellers, lawyers, and local authorities for smooth transactions and turnover.

• Negotiates loan changes on behalf of the property owners to avoid foreclosure.

How to Become a Foreclosure Specialist – The 5 Steps

Okay.

Now that you know what’s expected from a foreclosure specialist, let’s move on to the steps on how to become one. 

Here are the 5 steps:

1. Get a real estate license
2. Study foreclosure subjects
3. Gain relevant real estate experience
4. Earn a foreclosure certification
5. Apply for a job or start looking for your own clients

Let’s take a closer look at the steps. 

Step #1: Get A Real Estate License

Get this. 

Foreclosure specialists are real estate agents that specialize in foreclosure. 

So it makes sense that the first step is to get your real estate license. 

Now, each state has its own set of requirements to get a real estate license. 

But generally, you will need to:

• Complete state-approved real estate pre-licensing courses
• Take and pass a real estate licensing exam
• Apply for your real estate license and provide all the necessary paperwork and fees
• Find a sponsoring broker

Here are the specific requirements for 5 states:

For the other states, you can click here to see a complete requirements chart. 

Step #2: Study Foreclosure Subjects

Of course, as a foreclosure specialist, you will need extra studies on the topic. 

For this, you can either take foreclosure programs or earn a Bachelor’s degree. 

Here are some foreclosure programs you can look into: 

• Fair Housing Regulations
• Foreclosure Laws and Compliance
• Foreclosure Operations
• Pre-Foreclosure
• Marketing Foreclosure
• Account Review
• Legal Document Review

If you want to make it easiest to get hired in a company or firm, then a Bachelor’s degree in any of these subjects is a winner: 

• Business 
• Legal support services or criminal justice
• Real estate
• Accounting or finance
• Sociology 
• Economics

So pick a subject that interests you and is relevant to your future career as a foreclosure specialist. 

Step #3: Gain Relevant Experience

Since foreclosure specialists handle a lot of paperwork and legal processes, you need a whole lot of experience. 

Working a couple of years as a real estate agent is great. 

You’ll already get the know-how of buying and selling property. 

Many foreclosure specialists also have a background in customer service. 

This will be helpful since your day-to-day involves a lot of communication, negotiation, and assistance to multiple stakeholders. 

Many times, you will have to face stressful tasks such as foreclosure prevention and payment collections.

But all this experience will only help you become a better foreclosure specialist. 

Step #4: Earn A Foreclosure Certification

Want to take your foreclosure training even further?

Then there are several foreclosure certifications that you can earn. 

Let’s go over a few. 

Certified Foreclosure Professional (CFP)

This is the most sought-after certification.

This is because it is specifically designed to recognize professionals who are experts in foreclosure prevention, management, and resolution. 

Now, for you to get this certificate, you need to have a good grasp of real estate foundation fundamentals. 

The CFP courses usually cover: 

• Foreclosure laws and regulations
• Foreclosure procedures, strategies, bankruptcy, loss mitigation techniques, and short sales.

What’s more, CFP courses usually last for two to three months and range from $500 to $1,000.

For certification, you need to be sponsored by your state or a mortgage organization or association.

Certified Mortgage Banker (CMB)

As the name implies, a CMB is primarily a mortgage professional who has been awarded certification by the Mortgage Bankers Association (MBA).

To get this certification, you need to pass the organization’s prerequisites and exam, as well as agree to follow their code of ethics. 

Some prerequisites include getting a mortgage license, having at least 5 years of experience in the mortgage industry, and completing at least 25 closed loans in the previous 2 years.

As for the CMB exam, this focuses on topics such as loan origination, secondary market activities, regulatory compliance, and financial analysis. 

The exam costs $495 for MBA members, while it’s $695 for non-members. 

Certified Distressed Property Expert (CDPE)

A CDPE is a real estate professional who specializes in short sales, foreclosures, and other distressed property transactions. 

Usually, this certification is given to real estate agents and brokers by the Distressed Property Institute (DPI). 

Aside from foreclosures, you will be learning more about legal issues, negotiation tactics, and short sales. 

The CDPE course just takes about 40 hours to finish. 

You will also need to score at least 80% in their 2-hour exam.

One prerequisite to this certificate is to be an active real estate agent or broker. So this is a good certification to take since you already have a real estate license.

The certification is only valid for 2 years – so make sure to renew this while you are practicing.

Certified Loss Mitigation Professional (CLMP)

CLMPs specialize in managing loss mitigation activities. 

If you choose this for your certification, the program will equip you with knowledge on avoidance of foreclosure, loan modification and negotiations, mortgage servicing, and other homeowner financial problems. 

This program will prepare you well for negotiation and problem-solving, which are needed in your daily life as a foreclosure specialist.

To be able to get a certificate, you’ll need to register first with the National Association of Mortgage Processors (NAMP) and take the online course available at any time. 

Afterward, you’ll need to pass the exam with at least 75% to be awarded the certification.

The certification costs $295 for NAMP members and $395 for non-members. The fee includes the online course materials, one attempt at the exam, and of course, the online course.

Certified Real Estate Negotiator (CREN)

Another foreclosure-recognized certification is the CREN. 

These are awarded to professionals who have comprehensive training in real estate negotiations and transactions. 

CRENs are well-versed in legal considerations, transaction structures, market analysis, financial analysis, and risk management. This makes them so valuable in foreclosure and real estate firms.

For those who will take CREN programs, you need to allot up to 2 months for learning and training and get at least 80% on your final exam score.

The program and certification fee is $299. 

Once passed and paid, you will receive your CREN certificate from the National Association of Realtors (NAR).

Short Sale and Foreclosure Resource Certification (SFR)

These are professionals who help homeowners facing foreclosure. 

As an SFR, you will be covering topics such as loss mitigation techniques, legal issues related to foreclosures or short sales, and foreclosure avoidance options in your programs. 

The SFR certification is authorized by the National Association of Realtors. It will cost you $99 for the certification, the 8-hour course, textbooks, online resources, and access to practice exams.

Other Certifications You Can Consider:

Here are other foreclosure certifications that you can look into:

• Accredited Buyer Representative (ABR)
• Real Estate Owned Property Manager (REOPM)
• Certified Loan Modification Specialist (CLMS)
• Certified Default Resolution Specialist (CDRS)

Step #5: Apply for A Job or Look for Your Own Clients

Newly-certified foreclosure specialists usually take 2 routes when looking for a job. These are:

• They apply to companies and firms 
• They look for their own clients by doing their own marketing

Where can foreclosure specialists work? 

Many go to real estate firms, asset management companies, banks, property investor firms, law firms, and government agencies.

For those who wish to try their hand individually, we suggest you create your own network and build your footprint. 

You can include your credentials on listings on real estate websites and online directories. 

You can attend training and seminars and hand out your business card. 

You can invest in advertising online and in newspapers.

All this will help get your name out there. 

 But, mind you, this will be the much harder route. 

Frequently Asked Questions About Foreclosure Specialists

How Much Do Foreclosure Specialists Earn?

Foreclosure specialists earn an average of $61,942 per year. Take note that this is base commission, similar to real estate agents.

Of course, there are several factors that will affect your salary – your chosen company, the state you practice in, and the size of the property.

The top 5 highest paying cities are as follows:

• Beaverton, OR – $30.19 per hour
• Fairbanks, AK – $28.15 per hour
• Salt Lake City, UT – $24.72 per hour
• Irving, TX – $24.69 per hour
• Dallas, TX – $21.77 per hour

Companies that pay well are as follows:

• Citizens – $48.51 per hour
• Shelppoint Mortgage Servicing – $30.86 per hour
• Roundpoint Mortgage Servicing – $28.26
• Fairbanks North Star Borough – $28.15
• FCI Lender Services – $25.46

What are the Skills Needed for a Foreclosure Specialist?

Foreclosure specialists’ day-to-day jobs will consist of many calls with stakeholders, document processing and organization, and operational work. 

This is why you need to have the following skills:

• Strong communication and negotiation skills
• Basic finance and math competency
• Highly organized and efficient
• Detail-oriented

How Can You Develop Your Skills as a Foreclosure Specialist?

Aside from getting certification and enrolling in programs, here are other ways you can level up your skill set:

• Sign up and attend training offered by private companies
• Choose companies and firms that offer free real estate-related courses upon entry
• Find someone who can act as your mentor
• Take the Short Sale and Foreclosure Resource Certification offered by NAR
• Get a Housing and Urban Development (HUD) identification number, which allows you to work with HUD homes  

Conclusion

And that is how to become a foreclosure specialist!

Sure, it might take some time to reach the top. 

But if you diligently work on these 5 steps, then you’ll soon be on your way to being the best foreclosure specialist you can be. 

So what are you waiting for?

Go ahead and get started right away!

Remember, it’s a long journey. 

So best of luck!