A woman was explaining to Barry Bent why she and her husband couldn't make their mortgage payment, even though her husband had promised Mr. Bent he would do so the day before.
Mr. Bent, an assistant vice president for Delta Funding Corp., was on the phone with the woman, hearing that they had planned to make a payment but, after discussing their finances during dinner, they decided they couldn't afford to pay just now. She's a substitute teacher who hasn't worked in a while.
When the woman finished, Mr. Bent said he understood and told the woman that a partial payment would suffice for the time being. He patiently gave her instructions on going to a Western Union office to wire the payment, instead of putting the proverbial check in the mail.
The woman agreed to make the payment on a certain date. But Mr. Bent entered a note in his computer to call the couple back in a week to remind them - yet again - to make the payment.
He'd heard this before.
Mr. Bent makes collection calls to consumers who are more than 90 days delinquent on their mortgage payments.
"As a collector you have to be like a detective, a teacher, and a psychologist," Mr. Bent said.
Welcome to the world of servicing subprime loans.
As of December, Delta was servicing about 14,000 loans totaling $933 million, making it one of the top 20 servicers of subprime loans in the country.
More and more conventional mortgage banks are starting their own B and C units or purchasing subprime lenders, lured by higher profit margins and a glut of potential customers.
Frank E. Pellegrin Jr., Delta's senior vice president in charge of servicing, said a company that wants to start its own subprime shop should hire a staff that understands the mindset of the borrower.
"The experienced collectors tend to be a lot more street smart," Mr. Pellegrin said.
Garfield Gregoire is one of these street-smart collectors. He is the last person to whom a borrower will speak before the foreclosure proceedings begin.
Mr. Gregoire, Delta's preforeclosure manager, said he encourages borrowers to use any means possible to make payments - such as using credit cards, dipping into savings accounts, or asking family members for loans. He even has a list of social services groups that might help.
"My accounts are in the critical phase. I have to push to get as much money as I can," Mr. Gregoire said.
Excuses and broken promises are a component of every subprime collector's day. Phyllis R. Edwards, Delta's assistant vice president and default manager, has done collections work on both the conforming and nonconforming side of the business. She knows from firsthand experience to expect the unexpected when servicing a subprime loan.
"Collectors have to completely alter their way of thinking," she said. "You're looking at the reverse of what you do as an A servicer."
Borrowers who overextend other sources of credit can cause big problems for subprime companies. Mr. Bent remembered how one borrower bought a new Mercedes and shortly thereafter had difficulty making mortgage payments.
The borrower's attitude was that "things are going to get better," Mr. Bent said.
Sometimes the collector has to be blunt. Mr. Bent said he hounded this particular borrower for four months, urging him to sell the Mercedes in order to make the mortgage payments.
"What are you going to do, live in the car?" Mr. Bent recalled asking the borrower.
A few minutes after Mr. Bent got off the phone with the substitute teacher, another collector came into his office waving two blank checks. A woman seeking to catch up on her late mortgage payments was waiting in the lobby. The woman, who spoke no English, wanted someone to fill out the checks for her.
Delta's Ms. Edwards said a humorous approach is key; you can't browbeat the borrower and then expect him or her to talk to you. "If you get the borrower on the defensive, you immediately have lost them," she said.
"It's a challenge, since every account is different," Ms. Edwards said. "It never gets boring." u