Latest Report Reveals Bleak News About Foreclosure Rates

On April 17, 2010, In business, By Takara Alexis

According to the RealtyTrac Year-End 2009 Foreclosure Market Report, 3,957,643 foreclosure filings were reported on 2,824,674 U.S. properties in 2009. This includes scheduled foreclosure auctions, default notices and bank repossessions.

That’s a twenty one percent increase in properties from numbers in data gathered in 2008, and a one hundred and twenty percent increase in total properties from 2007. According to the report, one in forty five housing units, 2.21 percent, got at least one foreclosure filing during 2009, up from 2008’s 1.48 percent and 2007’s 1.03 percent.

In the month of December alone, foreclosure filings were reported on 349,519 properties in December. That’s a fourteen percent jump from the previous month of November and a fifteen percent increase from 2008. However, even though there was an increase in December, foreclosure activity in the fourth quarter of 2008 has decreased by seven percent.

Out of all of the states, Nevada captured the nation’s highest state foreclosure rate; more than ten percent of housing units received at least one foreclosure filing in 2009. This is Nevada’s third consecutive year at the top of the foreclosure list. Nevada’s foreclosure activity in December increased twenty seven percent from the previous month, but still was down by twenty two percent from December of 08.

Arizona claimed the nation’s second highest state foreclosure rate in 2009 with more than six percent of properties receiving at least one foreclosure filing during 2009, and Florida claimed the nation’s third highest foreclosure rate at 5.93 percent of its properties getting at least one foreclosure during the filing year.

Clearly, this raises concerns in the debt collection industry. Recent trends have illustrated that consumers are raising up their credit debt and low balling their assets to receive lower payment plans. The fact that they are maxing out their credit cards to receive lower payment plans does not look promising.

Mallory Megan is employed by a debt collection agency. Also she composes articles on business and finance, consumer spending and collection agencies.

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Debt Collection Practices

On April 15, 2010, In business, By Mallory Megan

If you owe money to a creditor debt collection agencies can report your debt to credit bureaus, file suits against you, and should be taken very seriously. The best way to protect yourself and your finances is a methodical approach. First, know why you are being contacted. Know what the debt is from and exactly how much it costs.

Inquire about the name of the person calling, the agency, the creditor, and the agency’s address and fax number. You have every right to tell a collector over the phone that you want all future contact to be in a written form. Follow up all requests with a written request.

Keep in mind if you tell the collector not to contact you at all it the agency is entitled to contact you once more to inform you how it plans to proceed. Another request that can be made is that you are the only person that can be contacted. It might be a good idea to keep a file including dates and details of phone conversations and when you mail out or receive letters.

If you do send any written correspondence to the collections company do this by Certified Mail, Return Receipt Requested. This guarantees that the letter reached the collector, giving you a signed receipt as proof. If you work out a re-payment plan over the phone, ask for the terms of the plan in writing. Any promise to remove or adjust credit history should also definitely be documented.

Be certain that you pay the right party; payments should be made to the collections agency, not the creditor, unless you have been otherwise instructed to do so. Carefully look over the amount you are being asked to pay. Get an assessment of any interest, fees or charges that have been added.

If you feel that your collector is being abusive, be certain to complain to the agency and keep this complaint on file. Finally, never ignore a collector even if you feel that the debt isn’t yours; they will continue to contact you and it may mean more trouble and time in the long run.

Mallory Megan is employed by a debt collection company. She also composes stories on business and finance, consumer spending and collection agencies.

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Bank Accused Of Bad Business

On April 2, 2010, In business, By Mallory Megan

Credit card issuer Capital One Bank and four other companies were sued by West Virginia Attorney General Darrell McGraw for deceptive and unfair practices and bad business conduct. The complaint was filed this week in West Virginia’s Circuit Court and it alleges that Capital One fooled consumers into repayment plans by sending out solicitations disguised as new credit offers.

Capital One offered to give consumers one dollar of new credit if they agreed to transfer the whole balance of a charged off account to the new credit card. This meant that Capital One could re-age debts to get around the statute of limitations, which would start anew.

According to the case, Capital One sent out cards with limits as low as 200 dollars for low-income customers with bad credit histories. With The cards membership came fees of up to 59 dollars per year. Generally, the annual fees were billed on the consumer’s second monthly statement, leaving the consumer with just 141 dollars of credit when they thought they had 200 dollars. Then, if the consumer mistakenly exceeded the limit, they could face over the limit fees of up to 29 dollars.

In recent months, McGraw’s office has gone after debt collection companies in part of an effort to protect West Virginia’s consumers. In November his office sued two payday lending firms and four collection agencies.

As members of the collection industry, we may scratch our heads and wonder why, in an economy that is doing poorly and where debt is running rampant, we cannot collect the money that consumers owe. Experts allege that with unemployment rates running so high, it is impossible for consumers to repay their debts. But bad business practices are not going to help the situation either. It may be a knee jerk reaction to try to con consumers out of money, but it is just that. A knee jerk reaction.

Mallory Megan is employed by a debt collection company. She also writes stories on business, finance, consumer spending and collection agencies.

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The Debt Collection Industry Today

On March 9, 2010, In Uncategorized, By Mallory Megan

The collections industry has grown quite large in the past couple of years. The reason for this is that collections and recoveries are typically outsourced business functions. It would be unthinkable for a creditor to try to handle retrieving debt from all of their accounts, so the creditors call upon the collections agencies.

But there seems to be a beginning of an enormous change taking place with the collections industry. The industry has grown to massive proportionas through the recession and seems giant. Rather than hire out more service providers, creditors are begining to lower the number of debt collection companies that they will work with, which requires the companies they originally hired to take on more accounts.The effects of this could change the way that the collections industry operates in a large way.

As the worst workers are removed from these collection networks, certain debt collection agencies are going to lose their most important clients. Creditors will also have less reason to work with companies that have a reputation for being inappropriate. The financial effects of this will cause these companies to suffer, and company value will also fall with some owners forced to sell their companies in distress.

As this happens, the most efficient performers will see a lot more potential job growth, less competition, greater leverage on contract terms, better revenues, and improved profitability.

Within the debt buying market, the same type of transference is also taking place. Instead of calling on more debt buyers, some creditors are lowering the number of companies they approach for selling the accounts.

Smaller, less efficient debt buyers will begin to a smaller chance to buy from these issuers. Again, concentration within the primary debt sales market will increase. Recovery executives within credit businesses will be making the same kind of choice more and more, picking concentration within their vendor networks over diversification.

Mallory McGuinness works for a collections agency that works with a debt collection lawyer. She also composes stories on business, finance, the credit industry and collections agencies.

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