The inaugural Re3 conference on Wednesday served as a platform for lender executives, repossession and recovery agents, as well as attorneys, to come together to discuss the industry’s challenges.

Mike Goins, head of loss recovery at TD Auto Finance, who served on the “The State of the Industry” panel Wednesday morning, called the event very enlightening.

When the economy tanked in 2008, defaults, delinquencies and repossessions skyrocketed.

As Goins put it, the industry was financing cars for “anyone who could fog a mirror.”

In response, many of those who work in the repo and recovery field ramped up in personnel and equipment to handle the high volumes. But even as they were handling these volumes, capital was drying up and automotive lending was significantly cutback, especially in the lower credit tiers.

Much of the new lending done since 2008 has fallen into prime. And on prime books, defaults are lower, meaning after soaring, repo volumes plummeted, according to those sitting on the panel.

This has led to some industry tension as lenders seek to continue to reduce expenses and repo and recovery agencies are trying to support their businesses on smaller volumes.

On the panel along with Goins was Kevin Camping, owner of Camping Companies; Mike Eusebio, owner of Digital Dog Recovery; Joe Poi, senior director of collections and loss mitigation strategy for Capital One Auto Finance; Chad Latvaaho, owner of Repo Inc.; and Pat Elliott, an attorney helping to manage risk in the industry.

Touching on forwarders, both Goins and Poi believe aggregators are in the industry to stay. Sharing a lender perspective, the executives explained that forwarders can help manage cost and regulatory compliance. However, both executives stressed their companies do not solely rely on forwarders.

“We are constantly analyzing where we go direct and where we go with an aggregator,” Poi pointed out. “We constantly measure and evaluate both. We don’t pick one over another.”

Chiming in to represent the repo companies on the panel, Eusebio asked, “What does it take to bring a car back to the yard (cost)?”

He responded to his own question by explaining that the cost to recover a vehicle and the fee the company is paid is so close that it makes business  difficult.

“How do we successfully do it?” he asked.

“We make changes and cuts. We’re not buying anymore tow trucks. We are also putting spotter cars out there to save. Before we could hit the streets and easily get six out 10 cars. Now we’re lucky to get four out of 10,” he said. He attributed much of this drop to the fact his company isn’t getting enough volume and must work retread “D” paper to try increase revenue.

While the low fees concern Eusebio, his larger fear is that a lawsuit could take his company out. Why? Because repo agents are working very long hours and if they know they won’t get paid unless they get the vehicle, this could lead to a more tense situation when he finds it. Will he use all the caution necessary?

Many companies are putting limits on how long agents can work, but Eusebio still finds the situation concerning.

“We won’t allow guys to work more than 12 hours,” he stressed. “But I’m still concerned it’s going to get to a point where someone is going to get hurt.”

Goins and Poi stepped in to address these concerns. Goins explained that he started out repossessing vehicles in Kentucky back in the 1980s.

He stressed that he wants “to make sure margins are strong on the back end.”

Both said their companies offer a varying pay structure based on where the asset is in the process.

A bit later in the session, a repo company owner in the audience addressed the panel and described how one of his two-year old tow trucks looks much older because of the rocks and things that have been thrown at it as it is driven through an inner city. He said agents are required to have laptops and use all this technology and yet the fee the company generally makes is the same as what it was doing in the 1980s.

“I can feel your pain,” Goins said.

Camping brought up technology as well, saying given the low volumes, paying for technology can be a challenge.

He just deployed more than 20 iPhones to his agents over a server to ensure they are all getting the information they need in the phones, such as vital phone numbers and apps that could be handy.

So how can lenders, repo companies and skip tracers, etc., increase their communication to better address industry concerns? Goins applauded the Re3 conference and held it up as an example. He asked the repo companies if their lender clients had brought those in the repo and recovery field together with the lender executives for events. A few instances came to light, but not many.

He read back some of the notes he had been taking while sitting on the panel, saying he’s going back to his company to take a closer look at the processes.

He and Poi both said they’re hearing the concerns. Goins noted that communication can be a challenge because lenders often run their back end in silos. He called for a regular industry forum where repo agents, recovery companies, skip tracers, lenders and more can come together to enhance communication.

He said this is something he is seriously going to look into at his company.

“2013 seems to be the year of emergence if we can survive 2012,” Goins said of the lending industry.

Poi added, “From a competition standpoint, business will grow dramatically.”

And given the overwhelming positive feedback on Re3, Bill Zadeits, conference chair, confirmed the event will be held again next year as part of Auto Remarketing’s Used Car Week.