We are more like a Special Assets Department for hire.
CRA has a highly skilled staff of loan review personnel, research analysts, and asset managers who carefully review every loan and work each file on a case-by-case basis. The asset managers are supported by a designated loan analyst and will perform extensive asset searches, credit checks, and other forms of investigation in order to build a profile on the debtor prior to ever contacting them. This strategic process allows us to negotiate and secure meaningful settlement with (and what tends to be) a more sophisticated borrower.
We do not have a high volume call center and do not pursue consumer debt such as credit cards or auto loans. This is simply not our specialty, and not what we do.
The average balance is approximately $100k. However, because of the type of debt we work, these balances can range from $25k to over $25MM.
Our recovery rate is difficult to measure given the wide range of loan files (nature and quality) we receive. In a single portfolio, the balance can range from $25k, to well over $25MM, so any percentage we recover can distort the “average” recovery rate. For example, we may negotiate a $15k settlement on a $25k loan (60%), and $150k on a $1MM loan (15%), both of which are acceptable settlements based on the analysis and the reasons “why” for each loan. However, the recovery percentage is vastly different, therefore, distorting any type of average number we could attempt to measure.
Our split is based on a number of factors including the size of the portfolio, loan type, average balance, the age of the loans, and the organization of the portfolio being sent to CRA. The proposed splits range between 40% – 50% depending on the type of portfolio we are working and whether it is a judgment or a deficiency.
CRA’s only source of revenue is generated by the recoveries we make. We are not a bank and do not benefit from deposits, origination fees, or loan interest. Our primary objective is to secure the most amount of money possible, in the least amount of time. Because every loan is unique, we have to manage each one on an individual basis. We know that no two debtors or scenarios are alike, each loan and the cost/benefit analysis of that loan are carefully managed.
We typically structure our agreements two ways, the first and most common agreement is an agency relationship, where CRA works on behalf of the client. The second type is where our client conveys or assigns the loans directly to CRA.
The reason we exist is to work the debt that is no longer being worked. At some point along the “life cycle of a deficiency” our client has stopped pursuing the debtor(s). The collateral is gone and a deficiency or deficiency judgment remains. Our core business activity is pursuing debtors after the collateral is gone. We add tremendous value to our clients bottom line by securing meaningful recoveries on files that have been written down, and are typically “off balance sheet” assets.
Neither law firms nor court appointed receivers aggressively pursue debt the way we do. Law firms are incentivized to exert effort where billable “action” is easiest to create. CRA has direct financial incentive to apply time and expense where recovery potential is optimal. Our extensive file review and debtor research sets us apart because we are not simply waiting for the debtors to call. Our only source of revenue is generated by the recoveries we make. We do not bill for other services and we do not get paid hourly because we were appointed by a court.
Yes. This is a routine part of what we do for every new file designated to our firm. Every file is treated the same as it goes through our initial due diligence and file review process. We recognize the daunting task of performing this type of review prior to designation, therefore, it is included in every engagement for debt recovery services.
We do offer a separate service for File Review and Stratification, and would be happy to provide a proposal for a specific scope of work. Upon completion of the review, if our client decides to engage our firm for debt recovery services, the fee would be deferred (possibly waived).
Every client is provided remote access to the CRA proprietary database. The client portal is easy to navigate allowing our clients to securely login anytime and view the current activity on any of their files. This same feature allows our client to select their files and create individual and summary reports.
CRA also provides monthly reporting of collection activities along with the appropriate backup for any third party expenses incurred, when applicable.
We are headquartered in Houston, Texas, but have the have the ability to work in every state. We are currently working the files throughout the country.
“Yes, we will always consider purchasing debt”