Replies to This Discussion

Permalink Reply by JJ Hornblass on June 17, 2009 at 6:05pm

It seems to me like unemployment is just a steamroller that overrides even the best of loss-mitigation initiatives. But maybe that is just cynical of me.

Permalink Reply by Marcie Belles on June 18, 2009 at 11:53am

I guess the goal is to be able to map the trend, then apply appropriate measures to debtors who are most at risk. For instance, some collection execs have started campaigns to call debtors even *before* their payments are late, just to gently remind them that payment is due. That way, should the debtor lose his job in a few weeks, at least one additional payment has been made.

Permalink Reply by Thomas Nusspickel on June 18, 2009 at 1:04pm

Marcie, your comments are spot-on. Even as a collection agency we are seeing some of our clients (both auto and credit card) send us early-out accounts. Most have been through a pre-collect inhouse where they attempted to contact them pre-delinquency.

It's a race to money right now. Whoever gets there first gets paid, the others get left out in the cold. We're seeing it in pre and post charge-off.

Permalink Reply by Marcie Belles on June 18, 2009 at 1:07pm

I would think auto lenders might have a bit of an advantage to collecting the money at this point, since as long as people have jobs, they're going to need their cars to get there. In many cases, borrowers are so upside-down on their mortgages that they feel there's no way they'd be able to get out from under the burden. But with auto loans, there's a tangible, necessary asset that consumers are afraid to lose.