Delinquencies

While still sizeable, rate consumers could handle a $400 emergency improves

WASHINGTON, D.C. - 

It’s taken five years, but federal officials are seeing an improvement if consumers faced a financial emergency roughly equal to one payment on their vehicle installment contract.

The Federal Reserve Board’s latest Report on the economic well-being of U.S. households indicated four in 10 adults, if faced with an unexpected expense of $400, would either not be able to cover it or would cover it by selling something or borrowing money. Officials pointed out this level is an improvement from half of adults in 2013 being ill-prepared for such an expense.

The report released this week goes on to mention that economic well-being has generally improved over the past five years. The project noted that 74 percent of adults reported they were doing at least OK financially in 2017 — up 10 percentage points from the first survey in 2013.

Even so, officials acknowledged notable differences remain across race, ethnicity, education groups and locations, and many individuals still struggle to repay college loans, handle small emergency expenses and manage retirement savings.

The report derived from the Fed’s fifth annual Survey of Household Economics and Decision-making (SHED) and examined the economic well-being and financial lives of Americans and their families. During November and December 2017, more than 12,000 people participated in the survey. They described their experiences on a wide range of topics, including income, employment, unexpected expenses, banking and credit, housing, education and retirement planning.

Among the new topics covered in this year’s report is the relationship between the opioid epidemic and local economic conditions, which could certainly impact whether a contract holder stays current or falls into delinquency.

The Fed discovered one in five adults personally knows someone who has been addicted to opioids, and those who do have somewhat less favorable assessments of economic conditions. Still, more than half of adults exposed to opioid addiction say that their local economy is good or excellent, suggesting a role for factors beyond economic conditions in understanding the crisis.

“This year’s survey finds that rising levels of employment are translating into improved financial conditions for many but not all Americans, with one third now reporting they are living comfortably and another 40 percent reporting they are doing ok financially,” said Federal Reserve Board Governor Lael Brainard. “Even with the improvement in financial outlook, however, 40 percent still say they cannot cover a $400 emergency expense, or would do so by borrowing or selling something.

“We learned that about one in five adults knows someone with addiction to opioids or painkillers; whites are about twice as likely to have such exposure as blacks and Hispanics; and exposure does not vary much by education level or by local economic conditions,” Brainard continued.

The Board’s SHED data looked at how individuals are managing their finances and making decisions vital to their financial lives and futures. Alongside the economic gains observed since the Great Recession, this report also noted challenges faced by people who are trying to piece together multiple jobs or who are struggling to establish emergency savings.

Among the report’s other key findings:

— Individuals of all education levels, races and ethnicities have shared in the economic expansion over the past five years, although reported well-being remains lower for racial and ethnic minorities and those with less educational attainment.

— Most workers are satisfied with the wages and benefits from their current job and are optimistic about their future job opportunities. Even so, challenges including irregular job scheduling remain. One in six workers have irregular work schedules that they did not request, and one in ten receive their work schedule less than a week in advance.

— Many adults are struggling to save for retirement, and less than two-fifths believe that they are on track with their savings. While preparedness for retirement increases with age, concerns about inadequate savings are still common for those nearing retirement.

The entire report can be downloaded here.

Nationwide Skip Experts watches accounts and resolutions jump by using masterQueue

DALLAS - 

When it comes to recoveries, double-digit improvements in certain metrics certainly are attention getters. That’s what Nationwide Skip Experts (NSE) has experienced recently.

NSE deployed masterQueue, an enterprise level skip tracing software, across its organization. Since deployment of the software, NSE said it has seen a dramatic increase in productivity and bottom-line results.

“Since going live with masterQueue, we’ve seen a 28-percent increase in the number of accounts worked over the last 90 days, which has resulted in a 12-percent increase in resolutions during that same period. I’m anxious to see what the future will bring,” said James McKellum, chief executive officer of NSE.

Intellaegis insisted that masterQueue delivers bottom line results for first-party finance companies and their third-party vendors. Its automated workflow tools can eliminate cumbersome manual processes involved in gathering addresses and phone numbers from dozens of data providers to contact customers finance companies have lost.

In addition to efficiency, masterQueue can allow the compliance rules associated with various State and Federal laws to be shared, along with the data, between finance companies and vendors, all in one system.

“There’s a reason Nationwide wins awards for their skip tracing prowess; their ability to quickly and easily adopt new technology validates their cutting edge capabilities and desire to deliver a more compliant and efficient model to their customers,” said John Lewis, chief executive officer of Intellaegis, who is part of the collection of experts set to participate in the Automotive Intelligence Summit on July 24-26 in Raleigh, N.C.

McKellum believes NSE clients can expect faster turnarounds, increased accuracy and more money in their pocket. This partnership with Intellaegis launches as NSE is coming off its most productive year to date.

“We are super excited for what is to come,” McKellum said.

2 reasons why auto finance stabilized in Q1

CHICAGO - 

Brian Landau, senior vice president and automotive business leader at TransUnion, again used a single word to summarize the latest quarterly auto finance information he and his team assembled. Landau decided the first-quarter moniker should be stabilization.

Landau explained his thinking to SubPrime Auto Finance News as TransUnion released its Q1 Industry Insights Report that showed performance of non-prime vintages helped to construct his assessment.

“Just looking the data, this was a quarter of stabilization. That’s how I would define it for a number of different reasons,” Landau began.

“One is we’re kind of trending like how we’ve done in previous quarters as originations are still in decline year-over-year, but the rate of decline is starting to slow down a little bit. I think we’re reaching a point of stabilization with regard to that,” he continued.

“Another key point is around delinquencies, which are rising but rising at a much slower rate. It’s a much different message now than what it was in 2016. There was a hike from 2016 to 2017 but just a marginal increase from 2017 to 2018,” Landau said.

“More recent vintages in the non-prime space are starting to show some marginal improvement relative to prior vintages with delinquencies growing in a less accelerated manner,” he added.

“All of those signs are pointing to stabilization in the market right now,” Landau went on to say.

TransUnion’s Industry Insights Report showed that tighter underwriting and improvements in the oil states appear to be positively impacting serious auto finance delinquency rates per borrowers who are 60 days or more past due.

After growing from 1.16 percent in Q1 2016 to 1.30 percent in Q1 2017, TransUnion determined the serious delinquency rate stayed relatively flat at 1.32 percent in Q1 2018.

Analysts noticed the top six states with the largest annual decreases in delinquency rates in Q1 2018 — Alaska, Wyoming, Texas, New Mexico, Oklahoma and North Dakota — are among the eight states where oil, gas and mining account for 10 percent or more of gross domestic product.

TransUnion added the other two states — Louisiana and West Virginia — also performed better than the national average in terms of annual changes in 60-plus days past due rates for Q1 2018.

When asked to explain what the trends in those states mean, Landau said, “This is another case of anomalies regressing back to the average. I would say the same thing when we had the financial crisis. There were certain states like Arizona, Nevada and Florida that were heavily impacted by the mortgage crisis. Then you saw them rebound pretty well. I see this as a similar trend.

“Oil and mining are necessities when it comes to manufacturing and transportation. They help the economy move forward,” he continued. "Until we get to a point where we’re moving away from these sources of energy, that will always be the case. There will always be demand for these commodity products.”

While total auto balances rose 5.2 percent to $1.183 trillion, TransUnion indicated this figure marked the lowest annual growth rate since Q1 2012, which at the time was 4.2 percent and on the rise. TransUnion also observed continued shifting in the origination makeup of auto finance holders, which continues to migrate to higher credit tiers.

Analyst added overall originations, viewed one quarter in arrears to account for reporting lag, declined 1.5 percent in Q4 2017. This marked the sixth consecutive quarter of yearly declines, though the smallest such decrease was in 2017.

With that kind of streak in place, Landau responded to the thought of whether the industry could ever see the significant growth the auto-finance space enjoyed coming out of the recession.

“You had a little bit of the perfect storm there,” he said. “You had pent-up demand for new vehicles driven by the fact consumers were delaying their purchases during and shortly after the financial crisis we had. In addition to that, you had below average fuel prices and inexpensive credit fueling demand for more expensive vehicles. In a sense, that helped to promote more financing than in the past.

“To see that kind of growth doesn’t happen too often,” Landau continued. “It may not repeat any time soon, but I would say the market is resilient, and people will still need vehicles to get to and from work, to other places of importance. And vehicles aren’t getting any cheaper, so there will always be the need for financing.

“There is a greater demand now for SUVs and CUVs, which have a price point relative to sedans,” he added. “The OEMs are enhancing the technology in vehicles today, increasing the value of the product. The economy is fairly healthy right now. Wages are growing. Consumers have the means to make more expensive purchases.”

Q1 2018 Auto FinanceTrends

 

Auto Finance Metric

Q1 2018

Q1 2017

Q1 2016

Q1 2015

 

Number of Auto Loans

 

79.7 million

 

76.4 million

 

72.2 million

 

66.4 million

 Borrower-Level Delinquency Rate (60+ DPD)

 

1.32%

 

1.30%

 

1.16%

 

1.02%

 

Average Debt Per Borrower

$18,581

$18,386

$18,065

$17,512

Prior Quarter Originations*

6.6 million

6.7 million

6.7 million

6.3 million

Average Balance

of New Auto Loans*

 

$21,678

 

$21,071

 

$20,598

 

$20,045

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

 

Q1 2018 Auto Loan Performance by Age Group

Generation

60+ DPD

Annual Pct. Change

Average Loan Balances Per Consumer

Annual Pct. Change

Gen Z (1995 – present)

1.76%

-1.1%

 $13,876

+ 2.8%

Millennials (1980-1994)

1.70%

-1.2%

 $17,650

+ 2.0%

Gen X (1965-1979)

1.49%

-0.7%

 $20,874

+ 1.7%

Baby Boomers (1946-1964)

0.84%

+2.4%

 $18,485

+ 0.5%

Silent (Until 1945)

0.77%

+8.5%

 $14,512

- 1.2%

Source: TransUnion

Update on credit-card usage

TransUnion also offered a trove of information about consumers using their credit cards.

With more than 416 million credit cards and nearly 175 million consumers with access to them, analysts indicated credit card usage continued its upward trajectory in Q1, according to the latest TransUnion Industry Insights Report, powered by Prama analytics.

TransUnion’s report found that serious credit card delinquency rates per borrower (90 or more days past due) increased in Q1 2018 to 1.78 percent, up from 1.69 percent in Q1 2017. The delinquency rate is now level with the 1.77 percent mark observed six years prior in Q1 2012, though it remains below the 10-year first quarter average of 1.91 percent.

Analysts indicated the average card debt per borrower also followed a similar path as delinquencies during the last year, rising 2.63 percent to $5,472 in Q1 2018 from $5,332 in Q1 2017.

“Though delinquency rates are certainly rising, there are several reasons we do not believe this is a worrisome trend at this juncture,” said Paul Siegfried, senior vice president and credit card business leader at TransUnion.

“First, credit card issuers have been relatively conservative over the last five quarters, issuing more credit to lower-risk consumers compared to higher-risk consumers. Second, the credit limits they are extending to consumers in most risk tiers are generally lower than those they had issued in prior years,” Siegfried continued.

“Finally, we believe it’s a positive sign for the economy that more consumers have access to credit and that delinquency rates, while growing, are doing so at a slow pace and remain below levels observed immediately post-recession,” he went on to say.

ARA honors 22 members during annual convention

IRVING, Texas - 

Ahead of the North American Repossessors Summit in April, the American Recovery Association also hosted its 54th annual convention where an array of topics associated with repossessions and recoveries were discussed by agents, finance companies and other service providers.

“We have a lot of exciting things in the pipeline for our members,” ARA officials said.

Along with the dialogue ARA also honored 22 members with a variety of awards, including:

Key Award
John Morgan

Dedicated Service Award
Brad Adams
Emily Massey
Leroy Royer

Special Recognition Award
Paul Bruce

Jack S. Barnes / Burton E. Greenwood, Sr. Industry Leadership Award
Buz Greenwood

50 Year Members
Ron Brown
Derrell Biddy
Bud Ernst
John Franklin
Alex Boegner
Myles Weiss

30 Year Members
Tony Doppler
Truman McClain
Wiley Nugent

20 Year Members
Malcolm Ray
Bob Stankovitch
Michael Beene
Mark Stelk

10 Year Pins
Lauren DeWitt
Mike Shell
Justin Buenger

ARS to outsource assignments via MBSi’s repossession platform

PHOENIX and EL DORADO HILLS, Calif. - 

MBSi Corp., and American Recovery Service (ARS) recently broadened their relationship.

The repossession assignment software and vendor compliance solutions provider and national repossession services firm are expanding their partnership as ARS will soon begin outsourcing repossession assignments through MBSi’s repossession assignment platform, Recovery Connect.

The companies indicated the first phase will involve assignments from their largest client, with future phases including other MBSi clients and potentially other ARS clients as well.

Executives explained this outsourcing change can allows ARS, which currently utilizes Compliance Made Easy, MBSi’s compliance and training management platform, to more effectively manage repossession compliance down to the individual assignment level.

“We are proud to continuously exceed industry compliance standards,” ARS chief operations officer Dave Copeland said. “Outsourcing through MBSi’s Recovery Connect platform, enables ARS to provide the recovery agent with real-time account status checks, geo-updates and instant ‘on-hook’ reporting of recoveries.”

ARS and MBSi have already began the integration effort necessary to put this announcement into practice and expect to begin by migrating assignments to Recovery Connect by early summer with further MBSi clients being completed by the fall.

“ARS has long been an innovative leader in the recovery industry, and we are proud that they have chosen to expand their partnership with MBSi. It is validation that MBSi’s focus on solutions that improve the efficiency and compliance during the recovery process is taking hold,” MBSi president Cort DeHart said.

Currently more than 2,000 recovery companies utilize MBSi’s platforms, including Recovery Connect, to manage and process repossession assignments. All of these agents have access to MBSi’s Recovery Connect mobile app and will soon be able to receive ARS assignments, check statuses and transmit Smart Updates with a single button.

Additionally, as Recovery Connect is integrated with both Clearplan and RepoRoute, the agent’s assignments can seamlessly transfer to their routing solution of choice.

CARS integrates IBEAM into Clearplan repo agent dashboard

RALIEIGH, N.C. - 

Another example of industry cooperation in the repossession world came to light on Wednesday.

Consolidated Asset Recovery Systems (CARS) announced that the forwarding company has integrated its IBEAM repossession and remarketing compliance portal with the Clearplan dashboard used by repossession agents to manage work assignments from their vehicles.

CARS explained its real-time connectivity can streamline communications and improve compliance with service-level agreements and regulations related to repossession tasks performed in the field. The IBEAM open architecture along with Clearplan’s technology can provide agents the ability to aggregate work from multiple forwarders and finance companies, eliminating much of the cutting and pasting of data that occurs between the disparate systems in use today.

In addition, CARS noted the open stance of these products can allow both agents and finance companies to share information from a variety of legacy systems.

CARS insisted that IBEAM has become widely accepted as the platform for many finance companies that work with more than one forwarding company. The IBEAM portal can enable finance companies to manage both their repossession and remarketing needs in a single platform providing transparency throughout the entire workflow, creating significant opportunities to enhance portfolio performance, control cost and assure compliance for all tasks.

“We realized that Clearplan provides similar benefits to Repossession agents in that it streamlines task, reduces redundant data entry, offering lower operating cost and enhanced compliance through improved real-time infield communications. Because of this, it was a clear fit for a partnership between our two companies,” said Terry Groves, senior vice president for Consolidated Asset Recovery Systems.

Clearplan founder Justin Zane added, “The IBEAM technology has a large footprint in the Repossession industry and provides flexibility in how it is deployed working seamlessly with core business systems.

“This along with the 700-plus certified agents that receive assignments from their technology provided an opportunity for us to improve efficiencies on a large scale and quickly deploy Clearplan and its benefits to many of the top repossession companies in the industry,” Zane went on to say. “We continue to see market acceptance of our agent dashboard and the integration with Consolidated is a significant endorsement.”

ENDTRUST rolls out platform to blend forwarding and direct repo models

BEDFORD, Texas - 

The auto industry relationship involving Jim Calvert and David Gryglewicz dates back several years, and now the pair has collaborated to form a new company designed to improve repossessions, recoveries and remarketing.

This new operation — ENDTRUST — looks to provide all the administration and management performance oversight offered through the forwarding model, while returning the recovery agent and relationship control back to the auto finance company client that’s inherent in the direct model.

Calvert and Gryglewicz believe they have strategically bridged this industry gap by aligning with leading-edge compliance and technology systems service providers enabling ENDTRUST to develop a platform that ultimately can deliver the “best of both world,” with forwarding and direct through what they’ve dubbed the Supernova Hybrid Model.

Through its relationship with these contemporary and innovative companies, ENDTRUST operates and facilitates its services built on three foundational pillars: compliance, technology utilization and workflow automation.

“No longer is it an either/or compromise where auto lenders have to choose between the forwarding and/or the direct model. They now have the unique first-of-its-kind opportunity to select a nationwide repossession service provider that provides the best both have to offer, all from the same platform,” Gryglewicz said.

At one time, Calvert was a top executive with the captive for Mercedes-Benz.

“In the late 1990s, I left the comfort of a growing prominent auto finance luxury brand to satisfy an aspiration of starting my own company. Unbeknown to me — like any fledgling new company, we had our challenges in what back then was a soon-to-be declining vehicle lease finance marketplace,” Calvert said.

“It wasn’t until the mid to late 2000s when we pivoted into a close related business venture in the leasing sector where we finally got some well-needed traction in a newly discovered untapped market. Since then, we’ve either started or acquired several other companies all with a clear immutable slant toward technology and innovation,” he continued.

Along with ENDTRUST, Calvert also owns and manages Fusion Auto Finance, Novak Motors, GrooveCar, CUXPRESS LEASE and GrooveCar Direct. Calvert recapped why his relationship with Gryglewicz intensified.

“When we started receiving inquiries from our lender clients regarding repo and remarketing servicing, there was only one name that immediately came to mind,” Calvert said. “I met David when still at Mercedes and then subsequently asked him to join me in my first company venture, EndTrust Lease End Services. There’s no one in the auto finance back-end outsource servicing space that has more experience and expertise than David.”

ENDTRUST now is a third-party national provider of repossession, remarketing and lease-end service management all functioning out of its operations center consisting of 44,000 square feet located in Bedford, Texas.

“When Jim Calvert first contacted me to discuss what he felt would be another great vertical in his family of companies, he asked, and I provided my personal insight as to the current state of the repossession/remarketing industry space,” said Gryglewicz, who now serves as president of ENDTRUST.

During the 1990s, Gryglewicz was one of the executives who led the charge in developing what is commonly known today as forwarding. He estimated that about half of all repossessions today are now secured through one or more of the 15 of the larger forwarding companies.

“There’s a far greater need for compliance, technology utilization and workflow automation today than any other time in the history of repo servicing,” Gryglewicz said. “When Jim and I sat down, we both saw this to be a crowded space. However, all the current large players have been around anywhere from 10 to as many as 25 years.

“Further, the universal inventory management systems providers who first came on the scene in the early to mid-2000s are still occupying the same space with the same systems since that same time,” Gryglewicz continued. “Where some may view this crowded space as a significant barrier to market entrance, we saw the same as an aging business model plagued by and encumbered with antiquated legacy systems and inefficient workflow infrastructure in what is now tapping out as a stagnant industry life cycle, ripe for disruption.

The result now is ENDTRUST and its Supernova Hybrid Model.

“Throughout my lengthy career in this space, despite the numerous benefits the forwarding model offers, there has always been and still remains today an equal contingent of lenders who continue to prefer the direct model,” Gryglewicz said.

“Right, wrong or indifferent, many lenders prefer to keep management of repossession operations in-house because of the ‘control’ they maintain working directly with recovery agents,” he continued. “Forwarding has a long list of administrative benefits any lender would enjoy, however, there’s always been a contention with the communication channel which flows from recovery agency to forwarder and then forwarder to lender. Many lenders aren’t willing to give up and live with what they view as too large a trade-off.

“On the flip side of the same coin, there are lenders who currently utilize the forwarding model that would prefer to maintain direct management control working and communicating directly with agents themselves,” Gryglewicz went on to say. “The model relationship that coexists today offers a ‘one or the other’ ultimatum proposition evidenced by a current industry partisan statistic showing half the industry’s use of the forwarding model while the other half utilize direct.”

ENDTRUST goes into more detail about its offerings in a video available here as well as at the top of this page.

Examining how mandatory updates truly impact the recovery industry

PHOENIX - 

Data driven insights are increasingly bringing new perspectives on the usefulness of long-established processes and practices. Over the last few years, MBSi Corp. has begun to dive deeply into the tens of millions of repossession-related data points contained within its iRepo database in an effort to discover new insights, uncover inefficiencies and challenge long held assumptions.

Those efforts have yielded more than a few head-scratching revelations. But none more significant, or potentially impactful, than what was discovered when we analyzed the cost of “mandatory assignment updates” and their benefits.

The mandatory update

In the recovery world, an “update” refers to a practice where a recovery company provides their clients information on the progress or ongoing efforts to locate a debtor or asset. Over the years, in an effort make sure their vendors were working the accounts, lenders and forwarders began mandating, through their contracts, the recovery company provide them an update on a regular basis, often every 24 to 48 hours.

Contractually, these updates are required even if the recovery company has no new, meaningful information and has not been able to check the address again during the required interval. When this occurs, the agent is often forced to choose between providing no update, advising the client they have not been able to run the address again, or providing a “fluff” update to meet the requirements of the contract.

These “fluff” updates have become the norm. While an update with new information is always valuable, a “fluff” update actually works against the lender’s and recovery agent’s mutual interest because it provides little value to lenders and yet exacts a heavy cost on recovery service providers. Nonetheless, contracts that require regular updates, even when there is no new information, continue to proliferate throughout the industry.

This outdated practice has resisted all advancements in technology such as email, assignment and mapping software, and even smart phones. Meanwhile, with increasing compliance requirements and shrinking margins the industry faces more challenges than ever before.

It’s clear that there is no “silver bullet” that will solve all the industry’s issues overnight. However, simple process changes such as addressing the ineffectiveness of the mandatory update can make an outsized impact on the health of the recovery industry.

Trust but verify

All industry participants share responsibility for allowing the wasteful practice of mandatory updates to continue: lenders who require updates but often don’t read them, repossessors who “fluff” updates to meet contract terms, and software companies that have enabled and encouraged the practice through automation.

So, why do we continue to do this?

One reason may be due to trust, or a lack thereof. Lenders and forwarders don’t trust that their agents are running assignments as often as they believe are necessary are failing to recognize the agent and lender’s interests are aligned due to the contingent nature of the contract.

Repossession agencies who fear a client will terminate them if they don’t provide an update, even a “fluff” one if necessary, are perpuating the cycle. This lack of mutual trust may be based on past experiences, both real and perceived, but it’s time to revisit this part of the lender-vendor relationship. This ongoing practice has created burdens without yielding any measurable benefit.

Economic impact of updates

In the keynote address at the Re3 Conference during Used Car Week 2016, MBSi shared findings with the industry in an effort to spur a genuine conversation regarding  the cost benefit  of this practice  of requiring mandatory updates.

According to data gathered by MBSi, repossession professionals regularly submit more than 30 updates, both real and “fluff,” per recovered vehicle. Each update requires a person on both the agent side and lender side to “touch” the assignment as they input and read the update information.

Forwarders experience a great impact, they must “touch” each update twice as they read the update from their recovery vendor and then provide the lender their own update. After analyzing the MBSi data, as well as information from industry participants, we concluded that each update “touch” takes about 3.2 minutes to process.

Based on recoveries recorded in the MBSi database from 2014-2016, the data revealed that despite more than an estimated $127 million spent annually processing mandatory updates, there is no statistical correlation between vehicle recovery rates and the number and/or frequency of updates.

Rolling up our sleeves

Based on these findings, MBSi worked with our clients to identify the necessary conditions that would allow lenders to change their update policies. Three critical lender questions were idenfitied:

1. Can the lender be certain the agent received and ran the assignment in a timely fashion?

2. Does the agent have real-time access to the account status to avoid wrongful repossession when a debtor brings an account current?

3. Is the agent who is working the assignment a trained professional that meets the lender’s compliance standards?

These questions were the driving force behind the development of MBSi’s Recovery Connect and Compliance Made Easy platforms. Now that these two platforms have been fully deployed, lenders can answer all three questions in the affirmative, on every assignment. 

Mobile technology and platforms like Clearplan and Recovery Connect allow lenders to verify that the recovery agent has received the assignment, physically run the address, and if a vehicle is located, check the status of the account before recovery–all in real-time. If the vehicle is not located, the technology can instantly verify the agent ran the account using MBSi Smart Updates that are geocoded and time-stamped, allowing the agent to create a verified update with a single button.

Elimination of the mandatory update process allows recovery agents to spend more time locating assets and providing genuinely valuable updates when new, meaningful information becomes available.  

Additionally, these mobile platforms are now integrated and connected in real-time to powerful compliance platforms like MBSi’s Compliance Made Easy solution that allows lenders to instantly view a repossession agent’s proper documentation, including license, insurance, training certifications and storage lot inspections. These solutions work together whether the lender uses a direct to agent, forwarding or hybrid recovery strategy.

One simple step in the right direction

The good news is that the solutions described above are available today. The technology been developed, deployed and adopted by almost all of the national forwarders and more than 1,700 repossession professionals nationwide. This widespread industry adoption demonstrates that recovery professionals are willing to take steps and adopt new processes that can drive big improvements in efficiency and compliance.

In the weeks ahead, we expect to see the first large national auto lender modify their policy on mandatory updates, and move toward smart updates. With this one lender, MBSi expects to eliminate more than 10 million updates or “touches” annually, saving repossession agencies and forwarders more than $8.6 million or $24 on every recovered vehicle. Hopefully, this is the first of many lenders to address this outdated practice.

Willingness to honestly evaluate the cost effectiveness of the mandatory update requirement is a step in the right direction for the auto recovery industry. Check out the recording of MBSi’s webinar here as we dive deeper into the impacts of updates and the opportunities to use technology for massive cost savings through Smart Updates.

Cort DeHart is the president of MBSi Corp. He can be reached at cdehart@mbsicorp.com.

Ally Financial gives top supplier honor to Primeritus Financial Services

NASHVILLE, Tenn. - 

A trio of executives from Primeritus Financial Services described how much it meant to receive a special honor from Ally Financial.

On Tuesday, Primeritus, a leading provider of recovery management, skip-tracing and remarketing services for the auto finance industry in the U.S., announced that it has received Ally Financial’s 2017 Supplier of the Year Award.

“We are honored to have received such a prestigious award from Ally.  I could not be more proud of our team for their hard work and the commitment to excellence that it took to achieve this.  We have enjoyed a strong relationship with Ally and are excited to see this grow in the future.” said Chris McGinness, senior vice president of operations for Primeritus. “We have made a concerted effort to deliver sustained results for Ally.”

Joe Mappes, executive vice president of client services and sales at Primeritus, added, “It’s extremely rewarding to be recognized as an industry leader by Ally. Our teams have worked very hard in developing a trusted relationship with Ally since we started working together in 2016 and has resulted in a strong and growing association between our companies.”

Primeritus president and chief executive officer Scott Peters also shared his thoughts on collecting the honor from Ally.

“We are elated and honored to have received this award.  Humbly, we also extend our gratitude to our excellent network of agent partners, who also share in this achievement,” Peters said

“We look forward to what the future has in store with Ally,” he went on to say.

March default reading mixed depending on comparison

NEW YORK - 

Auto finance defaults improved a bit on a sequential comparison but deteriorated slightly on a year-over-year basis in March, according to the latest S&P/Experian Consumer Credit Default Indices.

On Tuesday, S&P Dow Jones Indices and Experian released their data through March, and analysts indicated the auto default rate fell 4 basis points from last month to 1.05 percent.

In March of last year, the reading stood at 1.00 percent, so the uptick registered in at 5 basis points.

S&P and Experian determined the composite rate — which represents a comprehensive measure of changes in consumer credit defaults — came in unchanged for March on a sequential basis at 0.96 percent.

The first mortgage default rate also was unchanged, settling at 0.72 percent.

However, analysts noticed the bank card default rate rose 14 basis points sequentially to 3.78 percent.

S&P and Experian explained bank card default rates have been higher or unchanged for six consecutive months, and now are at their highest level since July 2012. Meanwhile the firms added auto and first mortgage default rates continue to remain stable.

Turn next to a glimpse at some of the largest U.S. population areas; analysts noticed three of the five major cities saw a sequential increase in composite default rates in March.

Miami had the largest rise, up 59 basis points to 2.13 percent.

The default rate for Dallas rose 2 basis points to 0.91 percent, while New York’s increased one basis point to 0.95 percent.

Chicago had the largest decrease, falling 11 basis points to 1.04 percent.

The rate for Los Angeles dropped 4 basis points to 0.60 percent.

S&P and Experian pointed out the composite default rates for Miami have increased for four consecutive months, moving up a total of 116 basis points in that span. The other four major cities have seen little change to their composite rates over the same period.

David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, offered more analysis about what the March data revealed.

“Recent patterns in consumer credit defaults continue,” Blitzer said. “The recent volatility in the stock market has not affected consumer sentiment and spending. The default rate on bank cards continues the modest increases seen in recent months while default experience on mortgage and auto loans is little changed.

“The favorable economic environment of stable inflation and unemployment explains the positive results seen in mortgages and auto loans. At current levels, the bank card numbers are not a cause for concern,” he continued.

“Among the cities reported here, Miami is the only one with a noticeable composite default rate increase. Miami tends to have more volatile and somewhat higher default rates than the other cities,” Blitzer went on to say.

“The sharp regional variations that characterized the period during and after the financial crisis are less evident in the data for the last few years,” he added. Changes in home prices vary less across the country. Moreover, mortgage rates are largely set on a national basis depending on monetary policy. Consumer credit defaults are less regional than 10 years ago.”

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