Like most businesses concentrated in mortgage, we are all looking forward to wiping the slate clean and going into 2008 with a fresh start.  With that all that being said, when you take a look at other industries that did well in 2007, the Debt Settlement industry had a great year. 

Debt Settlement is a for profit business model, as opposed to the other side of the business that is not for profit, credit counseling.  A consumer who has at least $10k in unsecured debt (credit card, store card or hospital debt) that simply can’t afford their minimum monthly payment is a perfect candidate for Debt Settlement — as long as they make some monthly payment.  For consumers to make a monthly payment, they should have some sort of income to support that monthly payment — so a full time job or even a disability payment does suffice. Typically the monthly payment is 1.5% of the debt load, so for $10k in unsecured debt the consumer would have to agree to make a payment of a minimum $150 to enroll in a program.  When they commit to the program their credit score will go down approximately 60-90 points depending on how much is being settled. 

Debt Settlement services are a great opportunity for mortgage brokers to diversify their offerings. For those of you that are not in Debt Settlement, let me explain to how similar it is to mortgage sales: 

  1. Most mortgage brokers that have bought leads online over the past 7 years through the boom have targeted sub-prime. Debt Settlement is ALL sub-prime.  Instead of telling Mr Smith who is behind on a payment and has a 500 FICO that there is nothing that you can do for him for his mortgage, now you would be able to help those consumers and put them in a program.  Most Debt Settlement Companies want to target consumers that are in hardship.
  2. Consumers are going on-line in record numbers seeking help and filling out forms to get quotes. Obviously, mortgage brokers are the most experienced when it comes to dealing with and purchasing semi-exclusive Internet leads.
  3. The target market is the entire country, not including just a handful of states that don’t allow settlement or where it simply is not worth it with caps on fees — very similar to mortgage as well.
  4. The sales process is similar in a way where you will be sending out packages to the consumers overnight with their application for the program and they will have to return them back to get enrolled.

All these similarities aside, there is one major difference between mortgage and debt dettlement when it comes to working with Internet leads. Folks in debt are extremely hard to reach by phone — they are avoiding creditors constantly by dodging phone calls, checking caller ID, and putitng up their own personal firewalls.  

So why am I telling you this?  A lot of your friends or co-workers have probably said to you “What have you heard about debt?” “Should we get into debt settlement?” “Do you know anyone doing debt right now?” etc…

I wanted to let you know that DoublePositive can be a solution for you in Debt Settlement just like we are for mortgage. We recently joined The Association of Debt Settlement Companies, and we are actively delivering LIVE Hot Transfer Debt Leads for our clients — many of whom used to be in the mortgage origination business.

If you have any additional questions in regards to this program, please don’t hesitate to give me a call.  I can also put you in touch with some of our good friends who are folks that will allow you to join their net branch affiliation and do your back-end processing so you basically can get trained and start up tomorrow.  These folks can explain the fee structure and payout better then I can as well as they will give you some basic sales training and tips for success.

Have a happy, healthy holiday season.