True Confessions of a Former Debt Collector

Attractive young man working in a call center
Wavebreak Media/Alamy
I have been yelled at. My family and my life have been threatened. I've heard every inappropriate word in the English language. It was all in a day's work for a mortgage debt collector.

There's nothing glamorous about debt collecting, but it's a necessary evil. Let's be honest, there are some people who can't pay their outstanding debts, and there are some people who won't.

I collected outstanding mortgage debt for one of the largest mortgage servicing companies, handling loans from Bank of America (BAC), Bear Sterns, Merrill Lynch, Countrywide and many others. The start of my time there predated the mortgage bust by a year, so I got to see exactly how banks had structured loans and people stretching themselves too thin. The job opened my eyes to the problems before they became supremely obvious to everyone back in 2008.

We had our hands in many of the most toxic and volatile mortgages being spun out during the run up to the bursting of the bubble.

We Don't Personally Call You

While I don't regret my time as a debt collector, I do regret many of my employer's policies.

Most of the large loan servicing companies use automated dialing systems. When I got to work, I logged into a system and within seconds, the dialing system would attempt to connect me to a delinquent account holder. Our goal was to connect with as many people -- and collect as much money -- as possible during our shifts. If we were able to get in contact with someone, we'd go through our script and try to convince them to pay their delinquent debt. Most calls were hangups or "no connects," but we did have a good handful of conversations with borrowers each shift.

Our dialing system would call a borrower once an hour until they were reached. We couldn't leave any messages and had to get in touch with the actual borrower. Our calling hours were 8 a.m. to 9 p.m. local time. This was seven days a week, with only a few holidays off.

Shady Payment Processing Happened Every Day

As a mortgage servicing company, it was our responsibility to take payments -- whether mailed checks, automatic bank drafts, or over-the-phone payments -- and apply them to loans. Seems straightforward, but it only took me a few months to realize we were creating trouble for borrowers. In a few cases, I discovered our payment processing department holding checks we'd received until after the due date. They would then charge the borrower a late fee, saying they hadn't received the check on time.

I got calls on a regular basis from borrowers who'd had their checking accounts double drafted: Our system would debit the mortgage payment on the regular date, then draft it again a day or two later. Not only would we not tell borrowers about it when we made these mistakes, but it would take us weeks to refund the money. Having seen this practice firsthand (plus an experience I had in which an auto-draft payment glitch led to me being briefly sued by a gym), I no longer allow companies to set up auto-drafts on my bank accounts.

You are Late the Day After Your Due Date

While your loan may indicate you are not charged a late fee until the 16th day after your due date, we had a different system. We considered all borrowers "late" as of the day after your mortgage was due. I had to discuss this policy on countless occasions until it was ingrained in my head. If your due date is the first of every month, then you were considered late as of the second. This is still technically true with most mortgage companies. They want their money on the due date. While they don't charge you a late fee, they can still start calling you to ask for the payment.

If Your Credit Score Drops, We Call You

Mortgage servicers had algorithms built into their systems to monitor your credit score. If your score dropped by a certain percentage, our system would add you into the calling queue - even if you'd paid your bill every month with no issues or late fees.

There was no worse feeling than getting connected to a borrower in good standing at 8 a.m on a Saturday morning. Since I could see all of the borrower's payment history, I would tend to try to end the call quickly and apologize. While my employer frowned upon this, I didn't like to disrespect those who were paying their bills on time.

We're Not All Rude Because We Want to Be

During my two-plus years as a debt collector, I learned I got the best results when I was kind to the borrowers and worked to help them. But I can honestly tell you the company I worked for didn't like it when I tried to help. Like many businesses with phone banks, they randomly monitored our calls to make sure we were "in compliance" with their policies. And I got in trouble a few times for providing helpful information to borrowers. I was told my job was to collect money and I shouldn't be focusing on helping. I even got written up a few times for it.

Still, I realized there were many people who were genuinely in need of a bit of good advice. Despite my employer having only one goal in mind, I felt it was my job to teach some of these borrowers what they could do to get around the collection calls and get current. Though I got in trouble here and there for that, I got away with it because I was still one of the top performing debt collectors in the company. Kindness, sympathy, and common sense worked.

Both Borrowers and Banks Were to Blame

When the bubble burst in 2008, we found out how many terrible mortgages banks had been giving out, then packaging up and selling to investors. The methods behind the securitization were terrible. Unfortunately, I got to see both sides of the story. Not all of the borrowers I encountered had fallen upon hard times. Many just wanted to "have it all" even though they couldn't afford it. I lost track of the number of people the auto-dialer connected me to who owned luxury homes and expensive cars -- but who had never earned enough money to cover their debts. I would talk to them about what they owed, and they didn't really seem to care.

I would argue both banks and borrowers were to blame for the mortgage crisis. Banks were giving away money to people whom they should have known couldn't afford to pay it back. Some borrowers were accepting the loans knowing they couldn't afford them. It was a vicious cycle. When my wife and I bought our first home at the height of the market in 2006, we were pre-approved for nearly $400,000 -- though our household income was only around $55,000 a year. Luckily for me, my time in the debt industry had taught me enough to recognize that amount was way more than we could afford. Banks never told you the amount they pre-approved you for was the maximum you could afford to pay just for the home. They didn't even factor our normal expenses into the equation. Millions of people all over the country were becoming instantly house poor the moment they signed the papers.

I left debt collecting after I realized I would rather help people than harass them. In a business where policies were dictated solely by profits, I was a poor fit.

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Robert John Donahue

Thank you. Ever consider writing a tell-all ebook? You'd help a lot of people. I'd buy it. One question: once you're in collection, what's the best thing you can do?

October 06 2014 at 5:18 PM Report abuse rate up rate down Reply
Samrat Sen

This is a really good read for me. Well, you have discussed here a lot of things about True Confessions of a Former Debt Collector. I can see that you are putting lots of efforts into your blog. Keep posting this type of good work.

August 27 2014 at 1:17 AM Report abuse rate up rate down Reply

I have had a bank account only briefly. I have good credit and always pay my bills. I belong to a credit union. The savings rates are better and I never pay fees. At 65, I have had a credit union acount since I was 18. They give such better treatment to their customers. Get rid of bank accounts they are just out to rape you with fees.

August 19 2014 at 6:27 PM Report abuse +1 rate up rate down Reply
1 reply to christ3459's comment

More info on the credit union please =)

August 20 2014 at 6:01 AM Report abuse rate up rate down Reply

I received a call one day about a "past due" payment from a woman collector. I wasn't past due on anything since I had made a scheduled payment to the hospital 10 days prior. she demanded $XX be sent directly to her office. she was told that I was headed out the door as she called to go to town and I would get to the bottom of this quickly since I now knew about it. she kept demanding the money and told me flat out "if I paid my bills I wouldn't be getting a call from her!!" I told her that if anything were due I would pay the hospital directly and she would see it show up within a couple of days. again, demanding money I told her that if she didn't shut up and never call me again I could locate her and go postal on her butt and hung up on her!! got to the hospital and found that the bill in question came in and before medicare paid their portion it was turned in by some idiot who was new on the job. a note has since been put in that all bills would be consolidated AND a payment plan has been set up. so no more problems from that end. but the gall of this thing calling me and threatening me over something as trivial as a bill less than $50!! some of these people get too wrapped up in their jobs and get plain nasty. I got my cell # in 05 and up until this past year I would get calls for one particular a-hole that uses this number for a contact number. it was a collection agency always looking for him. told them several times my name and had no idea of who this yo yo was etc.. guess finally got them straightened out and they quit calling.

August 19 2014 at 1:45 PM Report abuse +1 rate up rate down Reply
RAF 803

Grayson, good article ,
seems like you would be a success in any business adventure,
I suspect there will be some comments attacking you personaly , pay them no mind ,

good luck in your new profession .

August 19 2014 at 7:20 AM Report abuse rate up rate down Reply

You are scum !!!!!!! You and your family will pay big time eventually.

August 19 2014 at 12:05 AM Report abuse -1 rate up rate down Reply
1 reply to jyatt7's comment
RAF 803

jyatt ,
my oh my ,
seems to me , you got some anger issues to deal with in your personal life.
I doubt if you even know or met Grayson , and you wish harm to his family ?
poor form , poor..

August 19 2014 at 7:24 AM Report abuse rate up rate down Reply

I understand needing a job and accepting this type of work. It will kill your soul. As the writer found out, each Supervisor has dollar goals to collect. Their job, income, and families depend upon how much they collect. How do you collect more? Harass more. Get shady. Threaten.
Banks and mortgage companies were fighting the same type of pressure. Banks were FORCED to loan to the unqualified, by Congress, to keep their charter. Specifically, Congressman Barney Frank, Senator Chris Dodd, who ran The Senate Banking committee, and Franklin Raines, who ran "Fannie Mae and Freddie Mac, (both government sponsored agencies.) Raines even managed to be paid a million dollar BONUS, AFTER the bubble burst, and he stepped aside.
The writer saw the problems coming. I, in home improvement sales, saw the problem coming a few years BEFORE the crisis! Even Stevie Wonder could have seen the problems. No one cared, as the greed was absolutely unprecedented, and wide spread. Consumers were HUSTLED by unscrupulous lenders, Politicians, and real-estate agencies, who preyed upon the ignorance of the average American. Good luck finding another job. NEVER forget what happened. It can happen again.

August 18 2014 at 7:00 PM Report abuse rate up rate down Reply
1 reply to phil's comment

Lenders don't seek to loan money to borrowers unable to repay their loans. Of course, they do want to generate loans from those who will repay. And it's impossible to discern with complete accuracy which is which.

As a result, a few borrowers who become unable to repay in the future get loans, while several more who would have repaid their loans are denied. Mostly because, left to their own devices, banks are inherently conservative. Sort of like you might be if you were to loan your own money.

Of course, then goons become involved. And their social engineering leads to employing force and coercion to mandate "affordable housing", which doesn't really make housing more affordable, but rather makes it more expensive, while requiring banks to assume risks they wouldn't otherwise assume.

Then the bubble finally bursts, and housing actually does become more affordable. And as soon as it does, the mouth-breathers who created the disaster look high and low for a scapegoat who can be blamed for the hubris that was actually caused by the knuckle-draggers.

August 18 2014 at 8:10 PM Report abuse -2 rate up rate down Reply

My husband and I were in a bad situation back in the early '80's when he lost one good paying job and could only get one that paid 1/2 what he was previous earning. I did get a retail job and then one day I got a phone call AT WORK from a bill collector. I told the person to leave me alone or I would lose my job and they would never get one cent. Needless to say they didn't call again.

Now I get phone calls every so often from bill collectors looking for a woman who was married to my son. She has taken out several loans using my son's name, claiming that she was still married to him, even though they had been divorced for over 10 years. How do I know? Well I got one bill collector who was willing to tell me a few things. When I explained that they had been divorced way before she took out the loan and at the time she was living with a boyfriend! I was able to tell the collector where this person was working but didn't have an address. They had a phone number, but she refused to answer the phone unless it was someone she knew. It amazes me how she could get several loans using her ex's name and work information, and then the loan company wants the EX to cough up the money!! Of course this same person lied to the court system about how much money she was making so that she could try to get a larger child support. Even one of the children admitted that to us after the incident, but lucky for my son, he caught what she had done soon enough. The check she showed the court was from a part time job she had not worked at for over a year! Today, when ever I get a call from a collector for this person I tell them where she works. She won't let us know where she lives, but thats ok, there are ways to find out.

August 18 2014 at 6:41 PM Report abuse -2 rate up rate down Reply
1 reply to Kay's comment

Lol nice! And she shouldn't have had that right, they should've asked him to be present for that to be possible. Maybe she slept her way to it but who knows. Glad to see some people standing up to these collectors, even for other things other than a mortgage. Sometimes they tell you different things than the actual business or company you owe the money to just so they can receive payment. It's a mad world out there. Namaste to you all -Amanda

August 20 2014 at 5:59 AM Report abuse rate up rate down Reply

It's very disturbing how many people place negative comments regarding someone's misfortune. Yes, some people/banks/brokers dealt in loans they shouldn't have, however, many people came upon hard times through layoffs/reduced hours etcc and have not been able to replace former income levels. I am one of those people. Fortunately we were able to weather the storm and have kept our mortgage current. My job only provides a third of my previous income but we are able to manage. Hopefully you will never have to go through hardtimes, but if you do.......remember the comments you are making today.

August 18 2014 at 6:00 PM Report abuse +5 rate up rate down Reply
1 reply to Frank's comment

It's really hard to walk a mile in another man's shoes. I feel that the rules as most here see them apply to me. I'm able-bodied and I should make the most sensible decisions I can regarding debt, so that I don't dig a deeper hole than I can reasonably expect to dig myself out of. Were I to suddenly fall ill, that might change.

I doubt that anyone here pontificating truly has that "What if you lose 80% of your income" scenario covered. They'll all boast and say they do, but that's because they've never seen it. Maybe they won't. Maybe they'll be lucky - then again, maybe not. Who knows?

August 18 2014 at 6:20 PM Report abuse +1 rate up rate down Reply
4 replies to jj2301's comment

The worst thing is they live for today and tomorrow never comes or it's another day (SAD)

August 18 2014 at 5:21 PM Report abuse rate up rate down Reply