Mortgages are the largest loans issued in United States, running into hundreds of thousands of dollars against each property. Many mortgage loan borrowers go above and beyond than what they can actually afford to become an owner of that expensive dream house.
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 real estate market makes a U-turn and becomes a nightmare for both borrowers and loan issuers.
Most Banks and Credit Unions have their in-house collection teams to remind borrowers in case they miss a payment. They may even report a late payment or a missed payment to the borrower’s credit report every 30 days. But those missed payments ain’t going away, they make the mortgage repayment even more steep and difficult for the borrower. Only a couple of missed payments can potentially push many borrowers beyond that point where they become a mortgage defaulter.
In-house teams of Banks and Credit Unions are indeed quite qualified. But when these teams are hit with a wave of mortgage late payments, defaults and foreclosures, they simply cannot keep up with the rising pressure and volume. To cut their losses, loan issuers like banks cut their losses and sell these loans to “Debt Buyer” companies who buying these debts with pennies on the dollar. Debt Buyers in turn assign this debt to collection agencies and lawyers, to collect maximum money from the defaulters.
Today (year 2019), the real estate market is super hot, and home prices have been increasing straight for the last 8-9 years. Many financial analysts believe that this is another housing bubble which will explode soon due to high real estate prices, global tensions, trade wars and nationalism attitude gripping the world.
During the times of housing crisis, Collection Agencies play a very important role. They are experts in collecting debt, and can employ tactics which the in-house team of financial institutions cannot even imagine. Collection agencies recover debt all year long, they are exposed to all sort 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 collections 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 3 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, outsource it to a collection agency for better collection returns.
If you are looking for an Collections agency with extensive experience in recovering and negotiating mortgage debt: Contact us