The human side of arrears collectors
Bob Young is managing director of CHL Mortgages
The most recent buy-to-let arrears figures from the Council of Mortgage Lenders show that the private rented sector is outperforming the owner-occupier market by some margin. The three months arrears rate for owner-occupiers stands at 2.06%, whereas among buy-to-let mortgage holders this reduces to 1.79%, or just 1.38% if receiver of rent cases are excluded. This is probably due in part to rental demand being so high that renters know they can’t afford to miss their monthly payments as they will soon be replaced if needs be. It also shows that the buy-to-let market has matured in the past few years and is now very much keeping its house in order.
We’ve noticed the trend in falling arrears ourselves over the past few years and have seen our own arrears situation improve to such an extent that we continue to outstrip the industry average. Given that we manage a book with in excess of 40,000 live mortgage accounts, this is no mean feat and something we attribute to the strength of our in-house collections strategy and processes, our asset management programme and the fact that we follow the tenets of Treating Customers Fairly. In the same way that repossession has always been an absolute last resort, we never like to see borrowers defaulting on repayments and we always work closely with those who may be struggling to work through any difficulties they may have.
A human touch is paramount in circumstances like this. The very mention of arrears collectors may conjure up images of heavies with baseball bats taking peoples’ televisions, but that really couldn’t be further from the truth. Many of our collections team are former underwriters who have a detailed understanding of the intricacies of the mortgage market and will work with borrowers in difficulty to tailor a solution that fits all parties. There are a million and one reasons why a borrower may have fallen behind with their repayments, many of them beyond their control, although we have seen our fair share of general tardiness and a simple desire/determination not to pay. Our experienced team recognise that fact and help stricken (and not so stricken) borrowers to structure a way of getting back on track.
We employ people in a number of different roles, but arrears collectors really do require a unique blend of skills. Given that we are an intermediary-only operation, some of our team will have only dealt with mortgage professionals before, but being an arrears collector puts them on the frontline dealing direct with the customer which calls for a different approach. It is a role that requires a positive frame of mind and huge amounts of training to help the borrower see the light at the end of the tunnel and engineer a solution and also the invaluable ability to talk to just about anyone, from high-powered portfolio investors to accidental landlords who have stumbled into the private rented sector. It isn’t always a case of going into peoples’ homes and sitting down with people though and sometimes resolutions can be reached via our Receivers of Rent who ensure the tenant maintains the mortgage payment.
It may not sound like the most glamorous of roles, but is a vital part of ensuring we keep our book as clean and profitable as possible, as well as being rewarding for the individuals concerned in helping borrowers getting their lives and portfolios back on track.