Oakwood turns round distressed debt

Monday 25th June 2012

Mortgage servicing firm Oakwood Global Finance reports that it is turning around distressed debt with a 100% success rate – that has nothing to do with automated systems.

It says that over the past 12 months, it has routinely achieved the collection of payments due on non-performing loan portfolios. 

This means that Oakwood is consistently helping customers to meet their entire scheduled payment each month, while also helping them reduce their arrears balance and help repair their credit rating.

The portfolios were purchased by Engage Credit, Oakwood’s affiliated regulated servicing platform, from major banks seeking to remove non-performing loans from their balance sheets. 

The portfolios typically had over 85% of the cases in arrears when acquired. 

Oakwood says its success is due to a case-ownership credit management strategy, by which staff assess current individual customer circumstances.

Richard Klemmer, partner at Oakwood, explains: “Our success in delivering consistent results is due to our special servicing capability. In difficult times you need experienced servicers capable of assessing individual circumstances who are also able to handle sensitive situations.

“When the housing market was booming, mortgage servicing resembled an automated assembly line. In times like these, customers require account handling at a personal level, and distressed debt requires a more considered approach.

“Even on loans that appear irretrievable, it is possible to balance the needs of both the customer and the lender if you can offer creative solutions to customers’ problems. The approach needs to be different in every case and such decision-making only comes with professional experience.”

In the eventuality that a customer cannot repay their mortgage now or in the future and needs to exit from the commitment, Oakwood says its asset management expertise “can achieve the best possible return for the lender and reduce the debts of the customer, even in extreme circumstances”. 

On occasions this can mean Oakwood investing its own money in a refurbishment project at the property in order to deliver a better sale return.