A key decision for any investor in the mortgage and loans sector is who to team up with to service their portfolios.
This question is normally asked by the investment team as they start crunching the numbers and modelling the different collection scenarios to establish the potential return on investment.
In highly competitive markets, where significant amounts of loan portfolios are being traded, servicers often lure investors by offering free due diligence or by showing statistical reporting from similar portfolios, to convince purchasers they are the right local partners and that their interests are aligned. In addition, in Iberia, some servicers are taking on board new large portfolios, without properly assessing potential capacity issues.
We have questioned the independence of some such services being offered; clear conflicts of interest may exist, due to the ownership position of the servicer or where there is no real skill within the organisation to carry out the services it promises to deliver.
As a result, not only is the timing of the deal critical for the investment returns to work, but choosing the right servicer before the boarding of portfolios is one of the keys for success, wherever that may happen in Europe.
Rockstead can deliver a truly independent and unbiased servicer review, whether an investor is deciding who to potentially team up with on a new portfolio, or by reviewing existing servicers who may already have portfolios on board.
Our reviews can be focussed on operational issues; review of management controls, collection strategies, complaints or data protection oversight. We can review external suppliers; debt collection agents, lawyers or estate agents and the service level agreements in place. Or, we can help with a more focused approach by carrying out reviews on individual files; data verification, forbearance, modifications and collection activity.
At Rockstead, we are firm believers in independent verifications to protect everyone’s interests. By engaging us at the outset, before decisions are made to work alongside any servicer, or by engaging us to review them regularly after the deal is done, will ultimately save investors time and money and give truly independent risk assessments.
If you would like to find more information on how we can assist with a servicer review, please give us a call today.