Collections 101

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Collections 101

• Ross (Mufasa) Martin - Moderator
• Manager
• Michigan Guarantee Agency
• Bill (Rafiki) Cantalope - Coordinator
• Director of Guarantor Government Services  
•  Enterprise Recovery Systems, Inc.

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Joe (Pumbaa) Catalano A.V.P.- Collections
Default Management NYHESC
Taida (Nala) de Guzman Director of Collections
NYSHESC
Frank (Timon) Brockley Director of Accounts
Control NYSHESC
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Collection 101

• In the great Circle of Life

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Types of Safari Hunts

• Possum Payer
• Consolidation Cheetah
• Rehabilitation Round-Up
• AWG Cage
• Circling Vendor Vultures
• Euthanize the Elephant

Nala
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Possum Payer

• Characteristics
• Compliant
• Steady
• Slow Moving
• React When Motivated

• Weapon Types
• Letters
• Telephone
• Payment Alternatives
• Credit Reporting

Nala
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Consolidation Cheetah

• Characteristics
• Fast
• Large Predator
• Leaps
• Longevity
• Becoming Endangered Species

• Weapon Types
• Keep Chasing Them
• Different Weapon Types
• Removal of Title IV Programs
• Offsets
• Threats of AWG Cage

Nala
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Changing the Hunt

• Why?
• Benefits For GAs
• Benefits for Borrowers
• The Eye of the Lion
• Market the Hunt
• Develop the Hunt

Pumbaa
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Changing the Hunt

• Benefits to the G/As
• Cash Flow
• Maximize Revenue
• Benefits to Borrowers
• Clean Credit
• Renewed Eligibility for Title IV Programs
• Avoids AWG Tax Offsets
• If eligible, possible deferments and forbearances

Pumbaa
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Changing the Hunt

• The Eye of the Lion
• Market the Hunt
• Capture the Lions Attention
• 2-Year Projection in a 2-Minute Span

Pumbaa
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Changing the Hunt
Pumbaa
Numbers Presented Are For Demonstration Only
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Projected 12 Month Results
Changing the Hunt
Pumbaa
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Changing the Hunt

• The Eye of the Lion
• Market the Hunt
• Capture the Lions Attention
• 2-Year Projection in a 2-Minute Span
• Keeping the Lions Attention
• -75 of HESC Revenue Is From Collections

Pumbaa
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Changing the Hunt

• Develop the Hunt
• Pilot Program
• Staffing
• Training
• Database
• Letters and Calling Campaigns

Nala
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Changing the Hunt

• Develop the Hunt
• Implement the Hunt
• Duplicate the Pilot
• Maintain the Eco System
• Modify the Hunt if Needed

Nala
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Rehabilitation Round-Up

• Characteristics
• Honey
• Stabled
• Bucking Broncos
• Desires Freedom

• Weapon Types
• Lasso the Horses
• Jumping Hurdles
• Dangle the Carrots
• Train Them to Keep Them on Track
• Clean-Up Credit

Nala
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Success of the Hunt

• of Total Collections
• Fiscal Year 05 3.25
• Fiscal Year 06 21.18
• Fiscal Year 07(Oct-Dec) 33.90

Nala
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AWG Cage

• Characteristics
• Harder to Track
• Wide Variety
• Repeat Offenders
• Lifers

• Weapon Types
• Constant Letters
• Skip Tracing
• Hard Core Collection Calls
• Employment Databases
• Garnishment

Nala
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The Opportunity with Circling Vendor Vultures

• If Commission Expenses are up
• Collections are up!
• Net Revenue Rules!
• Contributed 48 of HESCs total Recoveries in
  FFYE Sept 2006
• More Difficult/Uncollectible Accounts
• Increased Collection Activity

Pumbaa
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The Opportunity with Circling Vendor Vultures

• With Our Combined Efforts, HESCs Projected
  Increase in Total Net Income
• 40
• By FY 2007
  

Teamwork with our vendors
Pumbaa
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Referral to OCAs

• Benefits
• Do We Refer Or Not
• Performance Measurements
• Monitoring
• Quantifying Results

Timon
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Referral to OCAs

• Benefits
• Virtual Staff
• Online Collection Resources
• More Technical Tools
• Staff Performance Incentives
• Flexibility
• Enhanced Competition

Timon
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To Refer or Not to Refer
Timon
Numbers Presented Are For Demonstration Only
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Referral to OCAs

• Performance Measurements
• Evaluation Criteria
• Batch Tracking
• Targeted Program Goals
• Administrative Impact

Timon
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Referral to OCAs

• Monitoring and Feedback
• Contractual Obligations
• Regulation Compliance
• Quarterly Conference Calls
• Site Visits
• Recall Process

Timon
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Referral to OCAs

• Quantifying Results
• 100 Increase in Recoveries
• Opportunity Cost
• HESC would have had to collect an additional 62
  internally to be able to generate the net revenue
  provided by our OCAs.
• If not collected by OCAs, would these accounts
  be Subrogated to the Department?

Timon
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Recall From Vendor

• One Last Visit to the Humane Society
• Last Run Through Databases
• Learned From the Past
• And Looking To the Future

Nala/Pumbaa
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Recall From Vendor
Pumbaa
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• HOW WE GET PAID
• Origination and Maintenance Fee- Now
  10/1/07 10/1/08 10/1/09 10/1/2010
• Per Loan Amount
• Loan Processing Issuance Fee .04
  .04 .04 .04 .04
• .04 per of total new loans
• Originated/guaranteed
• (not consol)
• Annual Account Maintenance Fee .01
  .004 .004 .004 .004
• .01 per of outstanding balance
  approximate calculation - TBD
• until paid off or defaulted
• Pre-Default Fees Per Dollar Averted
• DAAR Fee .01 per of total .01
  .01 .01 .01 .01
  
• Averted loan

Pumbaa
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• HOW WE GET PAID
• Now 10/1/07 10/1/08 10/1/09
  10/1/10
• Default
• Per Dollar Collected
• Regular Payments .23
  .16 .16 .16 .16
• .23 per of each
• payment
• Consolidated Loans .10
  .10 .10 .10 .10
• .10 per of total
• Consolidated Loans
• Rehabilitated Loans .37 .37
  .370 .37 .37
• .37 per of total
• Rehabilitated Loan

Pumbaa
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Euthanize the Elephant

• Characteristics
• Massive
• Dead Weight
• Long Life Spans
• Lifers

• Weapon Types
• All Weapons
• Continued Offsets
• Assignment ED

Nala
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Collections 101
We are all connected in the great Circle of
Life. -- Mufasa
Nala
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