Why Should an Institution with no Collections Department Install a Collections Software Platform?
When speaking with bank and credit union Presidents or Chief Lending Officers, we sometimes hear the following question; “our Loan Officers are responsible for all collections efforts, and we do not have a Collections Department - How would collections automation software help us?” This is a fair question, as logic would indicate that if an institution does not have the delinquency volume to warrant a full-time collections employee, then it probably doesn’t warrant an investment in technology either. The widespread approach of “You make it, you collect it” is common, however radical and extensive collection compliance changes may challenge that traditional approach, bringing risk exposure. What many institutions quickly realize when implementing a collections platform is that gains in productivity, tracking, and collections compliance enforcement provide an immediate return, and may greatly outweigh the investment.
When Loan Officers share their collections routines with us, we typically hear processes which include working off a printed delinquency report, making a bunch of calls and leaving messages, scratching notes in the margins, and then sitting in a meeting once a week or so to discuss problem loans. In truth, collection tasks are not their “passion”, and these calls can often get delayed (perhaps skipped), and might be poorly documented – certainly they would rather be writing new paper. While understandable, this practice could be creating significant compliance risk. Collections platforms can streamline these processes, freeing up valuable time for the Loan Officers; instead of thumbing through a printed report, they can easily see a Queue or list of accounts needing action or calls. Collection platforms can also fill the compliance gap, automating calls and letters with clean documentation… Instead of scratching out notes in the columns of a report, they can use simple Standard or Freeform Messages to document their activity. Past collections activity and contact attempts are clearly displayed and remain easily accessible to understand the history of an account. Instead of manually composing letters or using Word templates, a collections platform can generate those letters (automatically documenting the account), saving hours of manual letter creation. Month end reporting and activity tracking can be simplified with robust reports, providing management with clear and accurate details on delinquent loans and collections activity associated with them. Collections software increases Loan Officer productivity and effectiveness, and provides management tools to better-track their activity and results.
Leverage Workflow Automation to Meet Compliance Requirements
One of the highest issues on bank and credit union executive’s radar is tracking and ensuring servicing compliance. Whether it is Fannie Mae, Freddie Mac, or CFPB servicing requirements, collections compliance is a hot-button issue with high stakes. Leveraging a collections software platform to automate loan servicing workflow and collections documentation, helps ensure that the required steps are being accomplished at the right time. An example would be Freddie Mac’s QRPC contact attempt - where servicers are required to initiate contact to the debtor on day 3 of a delinquent mortgage. Without a platform to tell the Loan Officer when a call must be made, institutions are left to “hope” that the Officers know enough about the servicing requirements to know what to do, and that they in fact do it. Platforms like CARM-Pro can automatically set reminders for the appropriate Loan Officer to reach out to the debtor on the required day – ensuring that servicing requirements are being met and documented in a collections compliance audit trail. Another example might be the multiple- Solicitation Packages, required to be sent on Day 30 and Day 60 of a delinquent mortgage; most institutions typically use a Microsoft Word template, copying and pasting debtor and account information into each one – again a time consuming and laborious process. CARM-Pro’s Rules Based Letter functionality completely automates Solicitation Packages and virtually any other letter – by automatically generating the appropriate letter or package for each account at the right time, and then documenting the activity within the account’s collections history journal. Collections Compliance concerns are easily addressed with a quality collections automation platform.
Ensure Collection Compliance and Increase Productivity With SoundBite®
Another tool that is often employed to ensure collections compliance, and to eliminate non-productive parts of phone time (dialing, voice mail, no answer, busy, disconnected) is the suite of integrated services offered by SoundBite, a strategic IBS Partner. IBS clients are increasing productivity and satisfying compliance via Automated Voice Messaging, Direct Connect, Text, and Email campaigns. Many Loan Officers complain that when working delinquent accounts, they are wasting time dialing/leaving voice messages/hearing disconnected phone system errors, and that they are in fact having very few conversations with the debtors. Leveraging institution-specific Automated Voice Messages (where the debtor receives a personalized recorded message, requesting a call back into the institution), allows for more conversations, additional payments collected, and increased efficiency overall. Dialing time is reduced, conversation time is increased, and the activity is automatically documented within the CARM-Pro collections platform for accurate historical tracking. Bank and Credit Unions are also finding it easier to satisfy servicing requirements on their guaranteed loans by leveraging the Direct Connect services through SoundBite – the system rings the debtor, takes them through Right Party Verification, and allows them to connect back to the Loan Officer or another employee. Loan Officers aren’t dialing for dollars, and better yet, required calls are being made at the right time. Clients who implement a collections platform in association with other efficiency and time-saving tools are finding that their staff is more productive, they are ensuring compliance, and they are receiving more payments in the end.
Bottom line: even without a full time collections staff, implementing a best of breed collections software package can assist Loan Officers in boosting productivity, collecting more dollars, and perhaps most importantly in this complex regulatory environment, ensuring compliance.