How to get borrowers to pay?
With foreclosures filings on the rise in Miami, many Miami, Florida and national banks are taking a different approach to the on going foreclosure crisis here in South Florida in effort to get their borrowers to pay the monies that are owed to back to the banks.
It used to be the norm that debt collectors would call borrowers at all hours of the day and practically insult and scare them into paying. But with the growing financial crises in our community, such heavy handed tactics were increasingly yielding less and less results for the Miami and South Florida banks.
As a result, a trend is developing. As reported in the Miami Herald, many South Florida banks are taking a new and “nice” approach in an effort to hopefully secure payments from the borrowers that have fallen behind.
For instance, SunTrust, here in Miami, has courted struggling borrowers with care packages and $200, while West Palm Beach-based Ocwen Financial Corp. helps connect homeowners with food banks, employment services and even suicide hot lines through a nationwide social service referral company.
This new “nice” approach to dealing with borrowers that owe banks money is just another example of how the current economic down turn has led many South Florida banks to think of new ways to address an old problem – how to get its borrowers to pay. “Banks spent billions of dollars in branding, establishing a name, and it all got blown to smithereens in minutes,” said Sylvia Ayalon, an analyst at the Consumer Mortgage Audit Center in Fort Lauderdale. “The traditional banking method was, `You owe me money; pay up or else.’ Now they have to rethink; they can’t be the big bully on the block.”
Today, banks are becoming more cognizant of the fact that in this economy there are many factors that have led to a foreclosure. Often times, it is the loss of a job. As a result, many Miami banks are now contracting with mortgage referral services, and job banks, in an effort to help their struggling borrowers land back on their feet.
“People don’t just need help with housing counseling anymore,” said MortgageKeeper President Rochelle Nawrocki Gorey. “They need help with their budget, unemployment, job training, résumé writing, groceries.”
This housing crash is more complicated than prior periods of economic unrest. Unemployment coupled with bad loans and underwater mortgages have significantly contributed to the economic meltdown both nationally, and locally. If you are facing this situation, or need further advise regarding the ongoing housing crises, please contact our office today.