Mortgages are the biggest loans issued in the United States, running into hundreds of thousands of dollars against each property. Many mortgage loan borrowers go above and beyond what they can afford simply to become proud home-owner of that expensive dream house. If a recession strikes, such mortgage loan borrowers are the first ones to become defaulters. Before their financial situation deteriorates further, it is highly advisable to quickly hire professional debt collectors to cut potential losses that a lender will incur. A collection agency that understands how the foreclosure/mortgage loan process works.
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Most Banks and Credit Unions have their in-house collection teams to remind borrowers once they miss a payment. They usually report a late payment or a missed payment to the borrower’s credit report every 30 days. But those missed payments are not going away; they make the mortgage repayment even steeper and challenging for the borrower. Only a couple of missed payments can potentially push many borrowers beyond that point where they become mortgage defaulters.
The last recession (year 2008-2010) taught us that when a recession strikes, there is a sudden spike of borrowers who cannot keep up with their payments due to job loss, rising interest rates, falling valuations and income losses. Amid these circumstances, the boom in the real estate market makes a U-turn and becomes a nightmare for both borrowers and loan issuers.
In-house teams of Banks and Credit Unions are indeed quite qualified. But when these teams are hit with a wave of late mortgage payments, defaults and foreclosures, they simply cannot keep up with the rising pressure and volume. To limit their losses, loan issuers like banks sell these loans to “Debt Buyer” companies who buy these debts with pennies on the dollar. Debt Buyers assign this debt to collection agencies and lawyers, to collect maximum money from the defaulters.
Today, the real estate market is super hot, and home prices have been increasing straight for the last 9-10 years. Many financial analysts believe that this is another housing bubble that will explode soon due to high real estate prices, global tensions, sanctions, trade wars, and nationalism attitude gripping the world.
During the times of the housing crisis, Collection Agencies play a significant role. They are experts in collecting debt and can employ tactics that the in-house team of financial institutions cannot even imagine. Collection agencies recover debt all year long. They are exposed to all sorts of excuses, situations and collection complications regardless of the economy.
Before the default loans are packaged and sold to debt buyers, many financial institutions follow a more practical approach. They outsource collections by partnering with a collection agency directly. These collection agencies act as an extension of banks and credit unions. Returns are usually a lot higher when a collection agency is involved.
To get a higher mortgage recovery, follow these three thumb rules
1. Transferring an account to a collections agency earlier, rather than waiting.
2. Scanning and storing all paperwork in electronic format and forward to the collections agency promptly when requested.
3. Rather than selling the debt cheaply to a debt buyer, outsource it to a collection agency yourself for better collection returns and profits.
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If you are looking for a Collections agency with extensive experience in recovering and negotiating mortgage debt: Contact us