Bullhorn you cant be to mad at the banks for buying into the forwarding model. It was a great need filled for them at the right time. It was packaged to allow the banks to cut entire departments of employees, give themselves another pot of money to pull from prior to their own come claim time. It did allow the banks to cut out entire departments, they are now able to pass a lot of the payroll expense to the forwarder and run with much less overhead.
The problem that has come up is the close % has dropped off the map from a national number around 75% to 30% (so im told please correct me if you know better than I). I have also been told that with these numbers and lack of communication between forwarders and Repossession companies. That the profitability of the collections departments have also dropped. So while it was able to save them money in the short term, time may show the lenders that they can still achieve a better bottom line out of the direct model. Or there may be new forwarding companies that pop up and land some large accounts that actually pay a fair amount and update the accounts prior to sending it out to the 3rd or 4th agent in 3 weeks.
So dont get to mad at the forwarders for being savy businessmen, recgonizing a need and jumping on the oppritunity to fill it.
The problem that has come up is the close % has dropped off the map from a national number around 75% to 30% (so im told please correct me if you know better than I). I have also been told that with these numbers and lack of communication between forwarders and Repossession companies. That the profitability of the collections departments have also dropped. So while it was able to save them money in the short term, time may show the lenders that they can still achieve a better bottom line out of the direct model. Or there may be new forwarding companies that pop up and land some large accounts that actually pay a fair amount and update the accounts prior to sending it out to the 3rd or 4th agent in 3 weeks.
So dont get to mad at the forwarders for being savy businessmen, recgonizing a need and jumping on the oppritunity to fill it.
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