Magazine article American Banker

Phone-Web Collection Service Churns out Fee Income Too

Magazine article American Banker

Phone-Web Collection Service Churns out Fee Income Too

Article excerpt

A Texas servicer of subprime mortgage loans says it is getting a double benefit from a service designed to help collect payments.

The phone- and Internet-based Speedpay Inc. service collects substantial fee income along with those payments, says Meritech Mortgage Services Inc.

Debtors use the service, at $6.95 per transaction, mostly to avoid being delinquent.

"This year I should make about half a million dollars in income from using it," said Craig Bashinski, vice president of call center operations at Fort Worth-based Meritech, a Dominion Capital subsidiary that services more than $4 billion of subprime loans.

Meritech's phone service representatives ask borrowers nearing delinquency whether they want to authorize check payments over the phone. If borrowers agree, the representatives enter their checking account information into software provided by Speedpay. The software creates versions of paper checks that can be printed and deposited immediately.

Speedpay, a unit of New York-based E-Commerce Group, also hosts a Web site and an automated phone center for Meritech. Borrowers can visit the site or call the center to authorize payments.

Though Western Union and other companies provide similar phone authorization services, Speedpay's combination of services is unique, Mr. Bashinski said.

Meritech began using Speedpay's service two years ago to get emergency payments from tardy borrowers and those nearing delinquency. The servicer pays Speedpay only when a transaction is made.

Speedpay said its fees are based on payment volume and average less than $1 per transaction. …

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