Credit Solutions: Collections Strategies

How is your firm assessing the ability of your borrowers to meet their commitments?

With credit card charge-offs hovering over $3 billion per year and the amount of noncurrent loans (90+ days past due) higher than ever, it’s critical for mortgage lenders and credit card issuers to be able to effectively assess the likelihood of collection for individual borrowers or portfolio segments and determine which portfolios to aggressively pursue, which to write off, and which to sell.

More and more consumers are facing rising mortgage obligations as home values plummet, thus exacerbating the need for mortgage companies to examine their collections strategies.

Potential U.S. Homeowners with No Equity (‘000)

Deciding When to Hold and When to Fold

By supplementing traditional credit scoring and decisioning processes with an economic profile of clients, mortgage lenders and credit card issuers can assess delinquent portfolios based on a customer’s ability to pay their mortgage or credit card bill. 

IXI’s Ability to Pay Solutions enable effective collection treatment strategies such as:

• When capturing funds is the priority, actively pursue delinquent customers who have significant ability to pay
• To minimize risk, write off or sell customer portfolios who have low discretionary spending capacity
• Gain incremental revenue from late fees for overdue accounts for those customers that have the capacity to pay, but let the mail pile up 
• Carefully monitor customers who have traditionally been on-time in meeting their credit obligations, but who have recently become delinquent; examine their economic profile to assess the likelihood that they can meet their credit obligations as rates change