Sunday, June 16, 2013

Debt collectors (hired by banks) go after deficiency balances from foreclosures from 2008 crisis

Banks and mortgage companies (and guaranty “companies” like Freddie Mac) are mounting an effort to pursue some persons who lost homes to foreclosure during the 2007-2009 housing crash for “deficiency balances”, particularly when they believe particular homeowners have “walked” from homes where they could have continued paying, or when they believe former homeowners may have the means to pay.
The story by Kimbriell Kelly appears on the front page of the Washington Post Sunday June 16, 2013, here.
Usually the financial institutions hire debt collectors to pursue borrowers, and sometimes sue.  Dent collection companies can form units specializing in these kinds of collections, just as with medical. 

But this was a problem in earlier crises, such as when real estate in Texas crashed in the late 1980's after oil prices went down, helping to precipitate the savings and loan crisis.  In those days, people sometimes could be responsible for deficiencies after unqualified “simple assumption” sales that are no longer allowed under FHA rules. 
James Wiedemer had covered all this in his 1992 book “A Homeowner’s Guide to Foreclosure: How to Protect  your Home and your Rights” (Dearborn Financial Press in Michigan). 

Saturday, June 01, 2013

Ten years ago, I started my own stint as a debt collector

About ten years ago, I started a two-month stint working as a debt collector for RMA (Risk Management Associates), near the Minneapolis-St Paul airport.  In August, 2003, I would return and come back to northern Virginia for family reasons.

I started the day after Memorial Day. The first day was “just” seven hours and started with training, that lasted a week.  On the second day, we had a quiz, on which we had to make 100% before we were admitted to the floor.  On the fourth day, we started practice collections.

I actually entered the floor (quite expansive and a real sight)  the following Monday, and worked on the ATT account, on small balance debtors.   The whole experience is still fresh in my mind. It was advantageous to be located in the Midwest, in central time zone.  We rotated shifts, sometimes going until 8 PM at night. 

I recall someone who told me her life went downhill after 9/11, as if we wouldn’t know what that was.  Another wanted me to pay his $65 debt personally!

The job was to create “urgency”, to settle by with check-by-phone, or Western Union.  It seems passé now. 

In early 2004, I applied for an was turned down for a job as a collector for a company run by a law firm in Rockville (and Frederick) MD.  It would have meant a long commute.