Most of us would like to believe a new, brighter day has dawned. Part of creating that reality for banks requires improving collections systems to locate troubled loans that can be prevented from hitting the default dustbin, then helping overburdened staff reach a resolution that gets the borrower paying again. There's also a bit of amnesia that has to be cured.

"The industry has forgotten how to collect. The [boom] economy had allowed it to lose that skill," says Dennis Moroney, a research director at TowerGroup. "Today that's a bad thing."

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