Listen to the Interview.

The debt buying process is one that has traditionally been highly manual with Excel spreadsheets flying around and not much automation or sophistication. But that has started to change as fintech has come to debt buying and selling.

My next guest on the Fintech One-on-One podcast is Matthew Wratten, the CEO and founder of EverChain (formerly known as Debt Trader). EverChain has created a platform that allows debt buyers and sellers to manage their non-performing loans with a level of technology and compliance not before seen in the industry. In this podcast you will learn:

The founding story of EverChain.
The state of the debt buying industry today.
What was wrong with how the debt sales process worked historically.
How EverChain has made it easier.
What is involved in the onboarding process for lenders.
The different lending verticals they operate in today.
The thinking behind the rebrand to EverChain.
How they are working with the buy now pay later companies.
The kind of volume you need to participate on EverChain’s platform.
How they work with debt buyers.
How they deal with buyers that receive a lot of complaints.
Matthew’s thoughts about when lenders should be selling their non-performing loans.
How they provide guidance to sellers on portfolio pricing.
His thoughts on the action the CFPB has taken against debt collectors.
How they are keeping on top of the changing rules at the different levels of government.
What is next for EverChain.

Below is the transcript - you can find the full episode on the LendIt website.

A TSUNAMI OF DEBT IS ON THE HORIZON. IF HISTORY IS ABOUT TO REPEAT ITSELF - HOW CAN CONSUMER LENDERS PREPARE FOR THE INCREASE IN DEFAULTS?

If you are like most consumer lenders, you know a portion of your loan portfolio will default. As a creditor, there are three things you can do when a customer fails to pay their debt:
1. Collect: Attempt to collect internally or Assign to a law firm or third-party collection agency
2. Sell: Sell the defaulted account and add revenue to your financial bottom-line
3. Nothing: Consider it a cost of doing business and write off the loss.

By Matt Grossman and Matt Wirz
Originally Posted on April 11, 2022 in the WSJ, download the PDF or view the full article here.

Demand softens for bonds backed by loans from riskier borrowers, along with shares of fintech consumer-lending companies. Investors are growing more skittish about bonds backed by consumer debt, worried that inflation and slowing growth will increase the number of low-income borrowers falling behind on car payments or credit card. Buyers of bonds backed by subprime car loans or credit cards are demanding the highest premiums over interest-rate benchmarks since mid-2020. Meanwhile, investors have punished shares of some financial technology companies that helped fuel a recent surge in consumer borrowing, such as Affirm Holdings and Upstart Holdings.

When lenders decide to sell their debt, they have options. Many choose to use a broker because they don't want to invest in the staff and the technology it would take to compliantly sell debt directly to a buyer. Sure, you could hire the staff, train them, and implement the technology – but that's a big lift. Because it's not just the technology expense upfront, but it's an ongoing expense to ensure that your technology doesn't just meet the needs of today's regulatory environment, but tomorrow's as well. You pay a broker a fee to cover the transaction, but it does not include compliance oversight – that still lies with you as the original creditor. 

A major consumer lender who had historically sold nonperforming loans (NPLs) directly to an individual buyer was experiencing a high volume of consumer complaints on their sold accounts. The lender wanted to determine if selling their accounts via EverChain's Certified Network would decrease the volume of complaints, due to the extensive vetting and compliance oversight of its members.

DebtTrader is Now EverChain, A Complete Recovery Management Solution

EverChain Kicks Off 10^th Anniversary with a New Brand, An Enhanced Offering, and Four Exceptional Senior Hires

[Henderson, NV] February 1, 2022 – DebtTrader, the industry's leading compliant and secure online debt marketplace, is now part of the EverChain family. Founded in 2012, the DebtTrader solution has become synonymous with innovation and compliance in the Accounts Receivables Management (ARM) industry over the last decade and will continue to play a central role in EverChain's new expanded 4.0 Recovery Management Solution (RMS) offering. EverChain plans to launch its enhanced RMS in early 2022.

Join ACA and EverChain for a power-packed webinar where you will learn how innovative new technology is helping creditors maximize compliance and enhance the consumer experience during the entire recovery process. We will explore how advances in technology have impacted the three pillars of charged-off debt management including Debt Sales, Vendor Placements, and Attorney Litigation. You will gain key insights on mitigating risk and maximizing return from industry experts including EverChain, whose DebtTrader platform was the first fintech marketplace for selling non-performing consumer receivables, Actuate Law, and Kino Financial. This unique group of women in consumer finance will discuss the top ways to monetize uncollected assets and give expert insights into what you need to know to be compliant and reduce risk to your bottom line and your brand when engaging in recovery.

View the 3 Pillars of Charged Off Debt Management Recording using the link below: