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The Repoman Cometh

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  • The Repoman Cometh

    BARRE — David Hough is a friendly, talkative guy. But if you're meeting him for the first time, there's a chance you're not going to be happy about it. That's because Hough is a "repo" man. The Barre businessman is owner of Eye on Vermont Investigative and Recovery Services, and he has been repossessing property in northern Vermont for more than 13 years.

    Just about everything, as it turns out, can be repossessed. Hough has hauled away heavy equipment, canning equipment, even a phone system from an office in Burlington.

    Automobiles, though, are his bread and butter.

    Hough has scaled back on recovery work lately because of the high-stress nature of the work and high gas prices. But those same gas prices, coupled with a sagging economy, appear to be causing the number of auto repossessions in Vermont and the Northeast to grow.

    Greg Vernet is the general manager of public auto auctions for the Thomas Hirchak Co., which runs the largest public auto auction in the state. In January and February of this year, he said, Hirchak auctioned off 72 percent more repossessed cars than they did during the same time last year. That high number then came to a screeching halt for a few months, Vernet said, before picking up again.

    "I don't know why," he said. "It's usually consistent, and then it just stopped."

    That trend didn't last, however, and over the past six weeks, Vernet said, the repossessed cars have started rolling onto the auction block once again. "The repos are out in full force," he said.

    Many late model cars are appearing at auction, which was "almost unheard of in past years," said Vernet. With the advent of high gas prices, vans and SUVs and family cars have made up the bulk of repossessed vehicles arriving at Hirchak's auction. Vernet also expected to see a lot of pickup trucks at auction, but there haven't been any.

    "This is kind of an Alice-in-Wonderland situation where what you expect is not what you get," Vernet said.

    Mark Bradley, owner of Buy Right, a used car dealership in East Montpelier, used to do his own repossessions as a "buy-here, pay-here" business, but he said he took too much of a loss and was spending too much time chasing cars and money. Bradley often buys vehicles at auction for resale.

    At the Southern Auto Auction in Windsor Locks, Conn., recently, Bradley said TD Banknorth had 100 repossessed cars, Ford Motor Credit Co. had 125, Citi Financial had 150, Capital One had 50, and Bank of America had 75, out of about 5,000 cars at the auction.

    "The amount of repos is unbelievable," Bradley said.

  • #2
    The path of repossession

    Once a borrower is in default and the lender decides to repossess the property, the lender calls a recovery agent, Hough said. Then it's up to the lender as to how they want to sell their property, but often a company like Hirchak will pick it up from the agent and sell it at auction.

    The process does not always go so smoothly, however. Hough said the TV shows that depict recovery agents physically holding people back and impersonating police officers are hogwash. In Vermont, he said, if a person tells a repo man to leave, he must do so, though the recovery agent can then go back at night, or follow the person to work and take the car from there.

    Hough has had run-ins with people who are less than eager to give up their property. He said one debtor in Chittenden County, who had previously threatened a banker, chased him down the interstate in another car.

    "He flew out of his house in shorts and a T-shirt," said Hough. As he was chased, Hough called the Burlington Police Department and gave them a heads-up that the man was following him. Hough drove to the department, leading the man right there. When they stopped, the man jumped out of his car and "started raving" Hough said, but the police intervened and told the man to leave.

    "You absolutely have to have good communications skills," he said. "If I have to let them down gently, I let them down gently."

    When straightforward communication fails and a borrower refuses to give up the property, one solution is to get a "Writ of Replevin," Hough said. The lender can go to superior court and request the writ if a car owner threatens a recovery agent.

    If the court issues the writ, then a sheriff can accompany the repo man — who usually represents the bank – to the borrower's house. (Police don't get involved in repossessions usually, because it's a civil dispute.)

    If the borrower still refuses to cooperate, an affidavit of non-compliance can be filed with the court, and eventually the borrower can be held in contempt of court.

    Hough, who has a degree in law enforcement, said it can then become a criminal matter and the borrower might have to appear before a judge.

    Once a car has been repossessed, the owner of the vehicle has five days to pay for the car and the lender can demand the full amount owed, according to Mark Bradley. The borrower also must pay the repossession costs, which usually run several hundred dollars, he said. Then there are late fees, legal fees and the cost of storing the car.

    "It's usually quite expensive," Bradley said, adding that most people can't afford to pay for the full cost of a repossessed vehicle.

    Representatives from several area banks, including Chittenden, Northfield Savings Bank, Granite Hills Credit Union, Community National Bank and United Community Credit Union either did not respond to calls or could not be reached in time for this story.

    In a phone message, Tom Leavitt, executive vice president of Merchants Bank, one of the state's largest banks, said the company has no auto repossessions under way. He added that the bank has very few 90-day or greater delinquencies for auto loans. Leavitt said Merchants Bank tries to work things out directly with customers.

    "The people on our staff are not aggressive. They're problem solvers," he said. Merchants Bank holds their loans in a portfolio rather than selling them to a secondary company, Leavitt added.

    Vernet, who deals with lenders and debtors at his auction company, sometimes mediating between the two, said larger financial institutions – such as Ford Motor Credit Co. or GMAC — are more likely to give loans that borrowers can't handle. He said Vermont benefits from the variety of smaller banks here.

    "This isn't like Florida with huge lending institutions," he said.

    TD Banknorth, one of the 20 largest commercial banks in the country, well-represented at the auction in Connecticut, declined to comment for this story

    Majestic Repossession & Transportation Corp. often repossesses vehicles in Montpelier, according to the Montpelier Police Department log. Majestic calls the police to tell them what car they're repossessing so that if an owner claims his vehicle is being stolen, the police can inform him that in fact his property is being repossessed.

    Majestic has offices in Burlington as well as Maine and New Hampshire, according to its Web site. Mora Fitzgerald, who works for Majestic in Burlington, declined to comment.

    "We never give interviews about repossessions," she said. "It's tough enough as it is."

    According to their Web site, Majestic also has a transportation outfit: "Majestic can move any and all units to the various auctions located throughout New England."

    Majestic also does "remarketing" of property, including a "running auction," according to their Web site, and they recondition cars and cut keys.

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    • #3
      Who oversees repossessions?

      It's unclear exactly who, if anyone, regulates the repossession business. In conversations with the Vermont Attorney General's Office consumer assistance program, the Vermont Department of Banking, Insurance, Securities and Health Care Administration, and the Department of Motor Vehicles, no one said they directly oversee repossession companies.

      Representatives from the agencies said they often work together on issues related to vehicle repossessions, but when asked specific questions about the number of annual repossessions in Vermont and high car loan interest rates, and they each referred to the other agency.

      Thomas Canton, the head of the banking division at BISHCA, said his agency regulates auto loans. Vermont law says for a loan secured by motor vehicle of the current and previous model year, the interest rate can't be more than 18 percent per year. For cars older than that, the interest rate can't exceed 20 percent.

      If there were any interest rates higher than what the law allows, "We would want to her about that," said Canton.

      Hough said high interest rates are what hurts borrowers the most, adding that he recently repossessed a van with a 22 percent interest rate. He declined to say which lenders hire him to do repossessions, however.

      Canton said a 22 percent interest rate would be against the law if given by a bank chartered by the state of Vermont. But he said that loan could have been on a credit card, for example, which would not be illegal.

      Jason Duquette-Hoffman, a program coordinator with the consumer assistance program said his agency takes complaints about financial agreements, and usually refers them to the division of banking at BISHCA.

      He said he hasn't processed any repossession complaints in his short tenure there.

      When the consumer assistance program handles complaints they usually try to mediate between the parties, Duquette-Hoffman said, and any activity that seems fraudulent would likely be reviewed by the attorney general's office.

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      • #4
        'Good people stuck in bad spots'

        Having been involved in the world of repossession, Hough, Bradley and Vernet are sympathetic to Vermonters who default on loans and have their property taken by lenders.

        In addition to seeing a high number of repos at auction, Mark Bradley, the owner of Buy Right, said many of his customers, particularly young people, have had their vehicles repossessed. They are often looking for $1,000 cars just so they can get to work, Bradley said.

        "I feel bad for the younger people. It's ruining their credit," he said.

        Vernet, too, meets a lot of debtors personally as they come to get their personal belongings out of their cars.

        "Most of them have hit a financial dive," Vernet said.

        Hough said divorce is another factor that drives a lot of repossessions.

        "You meet a lot of good people stuck in bad spots," he said. But that doesn't mean they've always been poor, Vernet and Hough agreed. "I've repossessed from cops, bankers, lawyers, rich people, poor people," Hough said. "Never a pastor though, because God provides.

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