By Selina Stoller, Summit AmeriFirst Holdings, LLC
Everyone has had that moment where they fall in love with an item from the department store and buy it on impulse only to return it after a few weeks.
The same happens often with loan sales. In fact, following the subprime mortgage crisis in 2008, federally owned finance companies had to push bad loans back to their original lenders, causing a huge hassle.
In order to protect your business and prevent buyer’s remorse after a loan sale, be sure to adhere to the following steps:
Don’t Sell Problem Customers
The majority of your customers will be reasonable and down-to-earth folks who will be a joy to work with. The others…not so much. Any rude, hostile, or just downright mean customers probably will not treat a new buyer any better than they treated you, so be wary when you sell off these customers. More often than not, they will be among the first buyback accounts. It is less of a hassle to hold onto problem customers in the long run.
Exclude Loans with Bad Collateral
The majority of buyers use their automobiles as collateral in a loan sale. However, nothing causes a customer to default on a loan faster than collateral that’s subpar. Don’t sell loans when you are aware of a blown engine, broken transmission, or a totaled vehicle.
Overcommunicate with Your Buyer
While loans are under recourse, your buyer should be providing you with regular portfolio performance reports. Most give updates on a weekly basis during the recourse period. By communicating this way with your buyer, you’ll be able to get a heads up on any potential buyback accounts and can help your buyer identify issues before they happen.
By keeping these steps in mind, you’ll be able to ensure quality customer service, a reputation for effectively communicating with your buyers, and the ability to curb buyers remorse after a loan sale.
- 11 May, 2017
- Josh Smith