Posts tagged as:

debt collection

During my years as a first party collector for a mortgage company we learned a lot about people who don’t pay their bills. One of the most common things we noticed is the people didn’t really understand why they couldn’t pay. They just knew that at the end of every month they had less money than was required to pay whatever bill it was that happened to be due. Most mortgage payments are due around the first part of the month so guess who didn’t get paid? There are so many reasons someone falls behind on their bills from gross neglect to dire medical emergencies. Our jobs as collectors was to take the emotion out and sympathize without allowing ourselves to empathize with them. In theory this allowed us to take an objective look at their situation to determine the proper course of action to resolve not only the delinquency but the situation that caused the delinquency to occur.

There is a big distinction in 1st party collections and 3rd party collections when it comes to the initial mindset of collections. As a 1st party collector you are a direct representative of the mortgage lender and your main goal is to ensure the borrower pays on time every month for the full duration of the loan. You don’t just want to collect, you want to make sure they are able to stay current. Your ultimate  goal is to improve the bottom line for the business and that means collecting regular interest payments from the borrower, not pissing them off and having to repossess* their home.

1st Stage of Collections

Collections on an overdue mortgage in my office would begin anywhere between 2-15 days past due. The initial contact attempts are mainly just to check with the borrow to ensure they didn’t “forget” to pay their payment or to see what the problem is and make arrangements to pay the current months payment. A good collector will realize someone who is already 15 days past due this month may not be on time next month and try to make arrangements for future payments as well. Collectors shouldn’t force the issue to much during this stage of “lateness” because the loan is most likely not considered delinquent until they are at least 30 days past due.

True Collections

When a loan reaches 30 days past due the loan is officially delinquent. Depending on the reporting dates for the mortgage company it could be reported on your credit report as late/delinquent immediately or not until the following month.  Collectors are in for a tougher go of it because they have to not only collect or make arrangements for the current months payment but they also have to make arrangements for the missed payment as well. The ultimate goal, regardless of the stage of delinquency, is always to bring the account current and ensure the borrower can keep it that way.  The goal of a good collector at this stage should be to take full assessment of the situation and determine what caused the delinquency and what the borrower might be able to do to ensure the account is brought current and stays that way.

Collectors can find themselves taking on the role of a very much uncertified debt councilor to people who don’t know they have anywhere else to turn. It is a hard situation to be thrown into but you learn to adapt and hopefully provide help to people who are in disparate need of it.

The Exception

When it hits the last week or the last couple of days of a month take all the good stuff I said about collectors trying to help and throw it out the window. In fact throw it in the garbage, crap on it, and set it on fire. At this point in the month the only goal of the collector, their boss, and probably their bosses boss is to meet the target delinquency goals so they can all get their bonus. What this means for the borrow is instant demands for payment, a total disregard for the customers overall well being and lots of phone calls. It isn’t unheard of for a collector to suggest a borrower take a payday loan or title loan to pay off their delinquent debt to the mortgage company. This is the point where you start to see people lose their cool, the bonuses for meeting goal can be quite substantial giving the collectors a big incentive to disregard what is best for the borrower and look at what is best for them. This is the unfortunate truth and greed of the collections world.

*When I talk about my collections experiences you may see me use the terms repossession and foreclosure interchangeably. To me they were mostly the same term since I worked as a collector for a company that did loans on mobile homes. If a mobile home had no property financed with it it is treated like a vehicle and registered with the Department of Motor Vehicles (DMV). You don’t foreclose on a car you repossess it, the same holds true for non-land deal mobile homes.

{ Comments on this entry are closed }

When you owe people money you want to hide in a corner and hope that something happens to change your situation. Hey that ten dollars worth of lotto tickets is going to come through this time.  A lot of people take the road of avoidance as a way to deal with past due bills in hopes their creditor may not be able to get at them. In three years of collections I found people who would go to amazing lengths to avoid paying a bill. The most creative people would actually move their house with out notifying us – we collected on mobile homes. The most common ways are to move and install renters, cancel your phone(s), and change jobs. When a debtor goes AWOL(Absent Without Leave) collection companies and creditors don’t give up, they get down to some good old fashioned skip tracing.

Skip tracing is the art of locating the unlocateable. Commonly used by bounty hunters as well as collectors it is as much an art of social engineering and ingenuity as it being a private investigator. To succeed at skip tracing you have to walk a fine line between legal and illegal to determine the location of the debtor. Most of the time the process is a lot easier than you would initially think but sometimes you really have to work at it. People who really don’t want to be found can make it down right impossible to get ahold of them.

Common Methods of Skip Tracing

  • Whitepages – This may seem to simple but a lot of people just don’t tell you when their numbers have changed. The easiest way to check it out is to look them up in the phone book. This method is a little more difficult now with so many people relying on their cellular phones as a means of communication. The phone book can help locate people who moved as well, especially if you know the city they moved to.
  • Old Phone Numbers – It seems counterproductive at first but moving backwards in time through old phone numbers you have on file will usually produce a few good leads. People may have been living with their mother, or used their mom’s house as contact number for a bit of time.
  • Employer – While not entirely a skip tracing method it is a viable means of contact. In some cases you can scroll back through old employers numbers in attempts to make contact. People can jump back and forth between jobs or you may get lucky and catch someone who is still a friend and give you a good contact number.
  • References – Do you remember when you filled out that loan form and they asked you for two-four references. Those lenders didn’t ask because they wanted to call and check up on how you acted when you were a kid. They got those contacts so they can hound them if you ever decide to go AWOL. Once the phone book has been exhausted it is time to get on the references. The initial numbers will be tried first, if those numbers are disconnected then it is back to the phone book to try there. If you still can’t find them it is time to expand your search.
  • Neighbors – When the references are all used up you can move outward towards neighbors. You can actually pull neighborhood searches based on an initial address. If you know where the debtor lives they pull addresses, names, and numbers for the surrounding residents. You then begin to call each of those contacts asking for contact information for the debtor.  You can’t really talk about who you are or why you are looking but the inference is there.
  • County Tax Office – The county tax office keeps records of the updated address for anyone paying/owing property taxes. When renters move in the county will typically still maintain a valid address for the property owner so they can continue to collect taxes. A skip tracer will then take that information and start back at the beginning to try to locate the debtor at the new address.
  • Credit Reports – When everything else fails you can pull a credit report. The credit report will disclose any new accounts the debtor has opened. The report will typically include the last reported employer as well information on other debts owed including information on how to contact those creditors. Using the newly gleaned information you can contact the debtor at work or start contacting additional creditors in hopes of sweet talking a contact number out of them.
  • Field Agents – When all else fails it is time to take to the field. Back when I was doing collections we saved the agents for the farthest past due accounts because it is expensive and takes a lot of work to get someone out there knocking on doors. The field agents are going to visit the home, leave notes,  and in some cases knock on a few neighbors doors.

The true art of skip tracing is the ability to deal with people. When you get someone on the phone who you have no real business with you have to be able to gently persuade them to give you the information you need. The saddest part of this whole process is 3/4 of the time the contact is to help the debtor out of their situation not make it worse. Just know even when you go AWOL the creditors are going to work to find you and collect their debt. When all else fails there is always court, and in extreme situations wage garnishment.

{ Comments on this entry are closed }