Portfolio Purchaser Creates University Lab to Analyze BHPH Data

Flock Specialty Finance, which typically helps clients purchase charged-off debt portfolios, has turned to academia to help produce alternative lending data for the buy-here-pay-here space, the company announced earlier this month.

Led by Associate Dean and Director of the Analytics and Data Science Institute Dr. Jennifer Priestley, Kennesaw State University in Georgia will host the Specialty Finance Lab in order to research traditional and alternative consumer borrowing data. The analysis is intended to improve the customer experience in BHPH and enhance risk modeling in the buying and selling of debt portfolios, according to the release.

This project came about when a client approached Flock about buying a performing portfolio in the BHPH space, rather than its specialty — charged-off debt.

“What we have found out is that it’s a different animal,” Greg Paullo, vice president of business development at Flock, told Auto Finance News. “It’s a new asset class for us and we’re servicing the middle market.”

There is often a lot of data in the subprime and deep subprime retail installment contract arena, but BHPH doesn’t have the same luxury. Flock’s clients are often large dealerships or servicing companies and this new pool of data from Kennesaw State University could help them make a better-informed decision.

“We expect to find some geographic trends,” and some alternative credit modeling that goes beyond higher credit scores equalling better performing loans, Paullo said.

It’ll likely be another month before the data is analyzed, and the company is still considering whether or not it wants to publish its findings in some sort of public index.