Introduction to Securitization

SERVICER QUALITIES

Standard & Poor’s (2004) has identified expected qualities for servicers for asset classes. Because they are important, we briefly describe them next.

Consumer Finance

This includes credit card and other forms of consumer credits. Here, the servicer should demonstrate the following abilities:

• Effective credit card utilization monitoring and portfolio retention initiatives.

• Demonstrate effective fraud detection procedures.

• Customer service environment that provides satisfactory degree of customer care, including an automated call distribution system, voice response unit, and Internet site for customer inquiries, transactions and overall productivity management.

• Management of delinquent portfolios including monitoring roll rate migration, FICO scoring and behavior modeling, loss mitigation counseling, and effective skip tracing.

• Demonstrate sound collection procedures with appropriate staff allocations and product-specific experience levels.

• Collection staff training including extensive Fair Debt Collection Practices Act (FDCPA) requirements and testing, soft skills instruction and negotiation techniques.

• Satisfactory oversight of collection staff, including continuous call monitoring, scoring, and feedback as well as periodic refresher training and certification courses.

• Effective procedures for payment plans, and matrix of approval levels for staff, middle and senior management. Satisfactory history of cure rates, promise-to-pay success rates ...