What's in Your Toolbox?

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A NATIONAL BANKRUPTCY SERVICES PUBLICATION

The human side of bankruptcy

Putting the “custom” in

customer service

USING REAFFIRMATION AGREEMENTS TO GET THE JOB DONE

WHAT’S IN YOUR TOOLBOX?

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NBSDEFAULTSERVICES.COM « VOL. 2, ISSUE 2

FORTUNATELY, WE’VE GOT MORE THAN TWO DECADES OF UNMATCHED BANKRUPTCY RECOVERY EXPERIENCE TO KEEP EVERYTHING IN CHECK.

Since 1987, we’ve focused on helping companies deal with the maze of bankruptcy cases by consistently increasing recovery results, reducing loan losses and improving the bottom-line performance of their bankruptcy portfolio. Contact NBS and let us help you stay ahead of the game.

NATIONAL BANKRUPTCY SERVICES

9441 LBJ Freeway, Suite 250 Dallas, TX 75243 1-800-766-7751

NBSdefaultservices.com

RESIDENTIAL MORTGAGE LENDERS AUTOMOBILE FINANCE COMPANIES BANKS, CREDIT UNIONS, & FINANCIAL INSTITUTIONS CONSUMER LENDING ORGANIZATIONS PORTFOLIO SERVICERS, OWNERS & INVESTORS

A NATIONAL BANKRUPTCY SERVICES PUBLICATION

IN THIS ISSUE

ISSUESA discussion of current trends

and issues in the world of bankruptcy and

bankruptcy servicing.

2

FOCUSInterviews with industry

professionals offering insight into servicing and

legal developments.

16

DATAInformation aggregated from

authoritative data sources detailing bankruptcy filing statistics around the nation.

10

TABLE OF CONTENTSTHE OTHER SIDE » Finding compassion in bankruptcy 2

WHAT’S IN YOUR TOOLBOX? » Using reaffirmation agreements to get the job done 6

BY THE NUMBERS » Taking a look at the state of bankruptcy 9

CASE STUDY » Customer service: A path to success 16

HOT SEAT » Larry S. Buckley 18

IN DEPTH » A look at the NBS proof of claim and plan review process 20

Lance Vander Linden, Chairman [email protected]

Larry Buckley, EVP of Business Development [email protected]

Brad Cloud, COO [email protected]

Ryan McManus Vice President Default Component Servicing

Tom Waters Vice President Default Component Servicing

The Ledger is a National Bankruptcy Services publication. © 2011 National Bankruptcy Services • All Rights Reserved

9441 LBJ FREEWAY, SUITE 250 • DALLAS, TX 75243

Contributing Writers Jennifer Brown, Adam Moore, Wes Wiley

Magazine Design The LTV Group, TheLTVgroup.com

[ turn the page ]

THE LEDGER » NBSDEFAULTSERVICES.COM

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FINDING COMPASSION IN BANKRUPTCY

BY ADAM R. MOORETHE OTHER SIDE


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The attorney sent me an email and I picked up the phone. Two advocates for their clients simply worked it out. She knew the is-sue far better than her client and I knew who at my client could fix the problem.

The matter was resolved quickly, inexpensively and perma-nently. No litigation, no fees, no delay. It is not often that a credi-tor’s attorney has the ability to correct such an easy mistake that makes such a big difference.

An hour spent at any bankruptcy court in the country paints a picture of America’s economic heartache. Borrower after bor-rower explains to the Court why they must once again seek the protection of bankruptcy.

The tune is the same, the verse unique. An elderly woman on a fixed income is unable to overcome the weight of her medical bills after her husband’s debilitating accident. A chronically unem-ployed father drowns in credit card debt while struggling to keep a roof over his children’s heads. A single mother loses her only job, unable to surmount her monthly bills.

While our economy slowly improves, the depth of this reces-sion is historic. The graph at left provides a stark representation of not only this recession’s depth, but its width as well. The graph represents the drop in unemployment from its peak at the begin-ning of several recessions.

Placing the full weight of blame on mortgage lenders or “bad” mortgages for the bankruptcy and foreclosure crisis is a farce.

A 2009 study by Visa found that mounting medical bills are the primary reason for over 60 percent of personal bankruptcy fil-ings. Furthermore, over 75 percent of those bankrupt families had some sort of health insurance.

While politicians make esoteric stump speeches and vapid sound bites to quarrel with each over the fight for healthcare, Americans, like the widowed woman above, are literally dying for a solution. It is becoming increasingly clear that the federal gov-ernment, or any state government for that matter, does not have the nerve or know-how to squarely address the matter.

The economic lives of many Americans fall to the players of the default loan world; to the attorneys for borrowers and credi-tors alike; to the call centers of institutional lenders; to the mid-level executives of collection agencies.

Large service institutions, whether they be mortgage, health-care or education, offer a paradox. Their sheer size and resources

allow for historically low costs, innovative products, but risk los-ing an element of personalized attention to their customers.

Americans have been too eager to trade the human face and customer service of their mom and pop shops for the Wal-Marts of America. And with that, comes a cost.

Mortgage companies offer historically low interest rates and innovative mortgage products to allow their customers a wide range of payment options, but lose the comfort of working with the same banker who originated the loan throughout the life of their mortgage.

Hospitals offer cutting edge medical science, but its rare to find a general practitioner who will walk you through every step of your health care. America’s universities offer an almost unlimited amount of resources, state of the art facilities and world-renowned professors, but a student may be in a class of hundreds.

One-on-one human interaction comes at a price and knowl-edgeable customer service representatives cost money. Attorneys, for both creditors and debtors, cost money. But a myopic view of the bottom line is what got us here in the first place. An invest-ment in connecting people will reap financial and political divi-dends.

Technology and volume veil the face of the people involved in bankruptcy and foreclosure. It’s that veil that contributed to the financial crisis just a few short years ago.

It’s far too easy for borrowers to look at mortgage companies as soulless entitles. In the same vein, it’s common for financial insti-tutions to not hear the story, often a painful one, beyond the loan numbers in their system.

The renewed challenge of our industry is to pierce the veil of the seemingly sterile cases and see the human element of an in-dividual’s case. Attorneys who take the time to ensure that their client’s perspective is heard, and who can demand that another person take the time to review an issue, are what will move this industry forward.

Brice, Vander Linden & Wernick, along with National Bank-ruptcy Services, is in a unique and powerful position to offer its clients this competitive advantage.

The widow who simply wanted to live in her home and over-come an innocent accounting error had options. Fortunately for her, she chose the best one in working with Brice, Vander Linden & Wernick and National Bankruptcy Services.

AN ELDERLY WOMAN, seventy nine years old and recently widowed, recently filed for bankruptcy. Her husband passed away in the midst of bankruptcy and her attorney converted her client’s case to a Chapter 13 to give the woman the opportunity to allow her to pass in their marital home.

Unlike the majority of people who are unable to complete their Chapter 13 plan of reorganization, the woman completed her bankruptcy in the hopes that she could spend her few remaining days in her own home. Her bankruptcy closed, and the stress and looming threat of financial hardship appeared to lift.

Shortly thereafter, I received an email from the attorney rep-resenting this widow fresh out of bankruptcy. As a creditor’s at-torney, I had worked with her in the past and knew first-hand that she was not someone to take lightly.

As a fierce advocate for her clients, she is known to be unafraid to take the legal steps necessary to protect the borrowers that seek her legal counsel.

Bankruptcy has a tortuous effect on mortgage accounting, and despite mortgage company’s best efforts, inadvertent accounting errors do happen. An error was made on this widow’s account and her loan was once again reflecting delinquent.

The looming threat of foreclosure returned.

Procedures, laws, protocol – all exist in the default industry to process complaints and to escalate errors. These procedures are in constant revision and the rules and laws put forth in bankruptcy are continuously evolving to better remedy these situations.

In spite of the intricate levels of laws, rules, processes and pro-tocol, nothing can replace two knowledgeable and competent ad-versaries speaking with one another in an honest and frank man-ner to negotiate a resolution. With the correct people on the phone or in a meeting, nearly everything is negotiable.

Far too often, the players in bankruptcy and foreclosure do not have a reliable and competent voice: whether it’s the widow with the accounting error or the mortgage company with an escrow shortage.

The widow’s accounting error was an innocent and inadver-tent mistake, but the effect of that mistake was monumental to her livelihood.

Procedures exist for these situations. Legal remedies are available. Formal complaint letters could have been issued. The bankruptcy case could have been reopened. Litigation could have ensued and this widow’s attorney was more than capable of com-petently presenting her case to a court of law and rectifying the issue. But she did not.

ADAM R. MOORE is an associate attorney at Brice, Vander Linden & Wernick, P.C. with a primary focus on

the Real Property bankruptcy portfolio. He is a graduate of the University of Texas at Austin and Southern

Methodist University Dedman School of Law.

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UNEMPLOYMENT DURING RECESSION PERIODS

USING REAFFIRMATION AGREEMENTS TO GET

THE JOB DONEWHAT’S IN YOUR TOOLBOX?


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COVER STORY

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A REAFFIRMATION AGREEMENT is an agreement entered into by a debtor and creditor in which the debtor agrees to pay their pre-petition debt in order to maintain their property that is subject to the creditor’s security agreement.1 The signing of a reaffirmation agreement waives the debtor’s right to have the debt discharged through the Chapter 7 bankruptcy. Some might ask, “Why would a debtor ever want to reaffirm an otherwise dischargeable debt?”

The answer to this question is that many debtors want to keep their property, and reaffirming their loans may be the only way they can fulfill that purpose. Similarly, a reaffirmation agreement can be a very valuable tool for both a creditor and a debtor in a Chapter 7 bankruptcy case.

Many creditors do not realize the benefits a reaffirmation agree-ment can hold for them, and likewise many debtors do not under-stand the potential positive impact a reaffirmation agreement can provide. Therefore, reaffirmation agreements are not always seen as a necessity in bankruptcy. Creditors may not take the time to solicit reaffirmation agreements to debtors, and debtors may not enter into a reaffirmation agreement because they have misconceptions as to the benefits the document will have on them.

VALUE OF A REAFFIRMATION AGREEMENT FROM THE CREDITOR’S PERSPECTIVE

One of the most valuable aspects a reaffirmation agreement can provide for the creditor is the concept of maintaining the sta-tus quo. A reaffirmation agreement essentially gives the creditor the ability to treat the account as it was prior to the bankruptcy.

Due to the fact that a reaffirmation agreement sets forth that a debtor will continue to pay their pre-petition debt, the creditor has the ability to put that account back into normal servicing. This allows the creditor to continue sending statements and communi-cating with the debtor.

If there is not an enforceable reaffirmation agreement between the parties, the creditor would not be allowed to do either of these things due to the discharge injunction that is put in place once the debtor receives a Chapter 7 discharge.

A large auto creditor said, “Re-attaching personal liability to the account allows us to service the account as normal. We can report as normal to the credit agencies and timely payments can assist the debtor in re-establishing their credit and maybe increase their credit score. I honestly see reaffirmations as a creditor’s best friend.”

Another important feature a reaffirmation agreement can have for the creditor is the potential to maintain positive cash flow. When a reaffirmation agreement is signed the creditor can keep the debtor in a performing loan, which brings in additional cash flow that the creditor may have never seen on a non-reaf-firmed loan.

Similarly, should the account default, the creditor has the abil-ity to collect on any deficiency balance after the repossession or foreclosure of a collateral.

On a non-reaffirmed account, deficiency balances are dis-charged and uncollectible. Similarly, a valid reaffirmation agree-ment can avoid the costs associated with repossessing and selling a vehicle. Many creditors would prefer to have monthly payments continue rather than the actual collateral.

One creditor states that the value of the reaffirmation agree-ment to her bank is “Collectability.” She goes on to provide, “[T]he bank sees Chapter 7 filings as a loss, and to know a certain percent of those accounts will be reaffirmed makes the curse of bankrupt-cy a little easier to deal with.”

BY JENNIFER BROWN AND WES WILEY


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VALUE OF A REAFFIRMATION AGREEMENT FROM A DEBTOR’S PERSPECTIVE

Many debtors and debtors’ attorneys have expressed to their credi-tors that reaffirmation agreements are harmful, and they refuse to sign them. This type of attitude has given many debtors a negative connotation regarding reaffirmation agreements. On the contrary, reaffirmation agreements can be incredibly valuable to debtors.

Just as maintaining the status quo is important to a creditor, it is to a debtor as well. By reaffirming a loan, the debtor continues to receive statements from the creditor, which they may not receive if the loan is not reaffirmed.

By receiving statements, the debtor can better manage their loan. Similarly, creditors have stated that they are more likely to have open communication with a debtor that has a reaffirmed loan than one that does not.

A large bank creditor stated, “We value reaffirmation agree-ments as it keeps the lines of communication between the credi-tor and the customer open. With no reaffirmation agreement the customers are left in the dark.”

Communication between debtors and creditors can be very valuable for a debtor because they are able to stay well informed as to the status of their loan, and express concerns or issues to the creditor in a direct fashion.

Another benefit of a reaffirmation agreement to a debtor is the fact they are able to keep their collateral as long as they con-tinue making the payments. By signing the reaffirmation agree-ment, the bankruptcy stay remains in place for the duration of the bankruptcy.

If a debtor does not sign a reaffirmation agreement, the stay could lift by operation of law, which gives the creditor the ability to exercise their state law remedies as to the collateral prior to the close of the bankruptcy. 2

Another valuable aspect of a reaffirmation agreement is that debtors can maintain good standing with their creditors. By re-affirming a loan, the debtor opens the door to post-bankruptcy loan modifications, which can include more favorable terms for the debtor.

Creditors have said that they are much more likely to work with a debtor, and explore loss mitigation options, when a debtor and creditor have a valid reaffirmation agreement.

A representative of a large regional bank stated, “[T]he bank wants to work with debtors to get accounts reaffirmed, as it im-pacts loyalty across product lines and truly saves losses in a big way.” The creditor went on to say that they have debtors call their office and express their appreciation for working with them dur-ing these hard times.

A valid reaffirmation agreement is also beneficial to a debtor because the payments that are made on the reaffirmed account are positively reported to the credit bureaus, which in turn has the po-tential to improve a debtor’s credit score.

A bankruptcy could have an immensely negative effect on a debtor’s credit. The reaffirmed loan can help to reestablish the debt-or’s credit so as to allow them to be able to secure reasonable interest rates and future credit.

THE NBS PERSPECTIVEInstead of asking “Why would a debtor reaffirm?” we would ask

the question, “Why wouldn’t a debtor reaffirm?” In light of the fore-going reasons stated in this article, we would urge creditors to look internally and externally to discover whether they are maximizing their company’s potential reaffirmation agreement performance.

Reaffirmation agreements can be a valuable asset, and it is important that creditors are taking advantage of the opportu-nities a reaffirmation agreement can afford them. A large auto creditor has stated, “Ultimately for a creditor, a reaffirmed ac-count is the best case scenario out of all the various outcomes possible in a Chapter 7 bankruptcy. A reaffirmed account is one that has a reactivation of billing statements, on-line access, and credit reporting opportunities, which are the most impacted ar-eas of a customer’s account when the automatic stay goes into effect. A reaffirmed account essentially allows a creditor to have interaction with that customer as if the bankruptcy had never been filed.”

Similarly, debtors and their counsel should revoke the nega-tive connotation that surrounds entering into a reaffirmation agreement with a creditor in a Chapter 7 bankruptcy. As previ-ously mentioned, a reaffirmation agreement can have multiple positive aspects for a debtor.

Debtor’s counsel generally don’t realize that by advising their clients to not reaffirm an account, they really only disadvantage their client.

Instead, debtors and their attorneys should note the positive aspects the reaffirmation agreement can have for the debtor, and encourage them to sign the document.

Reaffirmation agreements are a win-win for both creditors and debtors. However, due to the fact reaffirmation agreements are voluntary for both the debtor and the creditor, reaffirming takes cooperation on both parties part. Therefore, it is essential that both a creditor and a debtor understand the benefits a reaffirma-tion agreement can have on each of them.

JENNIFER HARDWICKE BROWN is an attorney with Brice, Vander Linden & Wernick, P.C., and has managed the

consumer bankruptcy portfolio since January 2008. Jennifer’s responsibilities include protecting the interests of

various major banks, credit unions, leasing and automobile finance companies. She received her Juris Doctorate

from the University of Oklahoma College of Law, and has been licensed to practice law since 2007.

SEE PAGE 17 FOR WES WILEY BIO

NOTES1. Section 524 of the Bankruptcy Code spells out how a reaffirmation agreement

should be drafted, as well as the elements that must be satisfied before a reaffirmation agreement can be enforced.

2. Under Section 521 of the Bankruptcy Code, a debtor must state their intention as to secured property. The debtor is given three options: redeem, surrender, or reaffirm. Should the debtor fail to file a statement of intent, fail to list one of the three options named above, or fail to perform their stated intent within the timelines set by Section 521, the stay will automatically lift as to personal property pursuant to Section 362(h)(1).

According to a recent study, 74% of respondents expect bankruptcy filings

to increase during the fiscal year of 2011

SOURCE: AMERICAN BANKRUPTCY INSTITUTE POLL

BY THE NUMBERS

74%


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> 7.5

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2011 STATE-BY-STATE FILINGS PER CAPITA

NATIONAL PER CAPITA FILINGS4.74%

FILINGS PER CAPITA: TOP 10

State Filings Per Capita

Percent Change1

Nevada 9.45 -1.65

Tennessee 7.43 -0.43

Georgia 7.39 -0.53

Utah 6.93 0.48

California 6.85 -0.06

Indiana 6.44 -0.68

Michigan 6.43 -0.26

Alabama 6.37 -0.79

Colorado 6.26 -0.22

Illinois 5.97 -0.27

FILINGS PER CAPITA: BOTTOM 10

State Filings Per Capita

Percent Change1

Alaska 1.46 -0.12

District of Columbia 1.68 -0.46

South Dakota 1.86 -0.18

Vermont 2.01 -0.61

North Dakota 2.12 -0.35

South Dakota 2.48 0.04

North Carolina 2.53 -0.27

New York 2.62 -0.23

Montana 2.67 -0.36

Wyoming 2.74 -0.04

STATE-BY-STATE TOTAL 2011 BANKRUPTCY FILINGSAND PERCENTAGES OF CHAPTER 7 VS. CHAPTER 13

State Cumulative 2011 Filings

Ratio of Chapter 7 Filings

Ratio of Chapter 13 Filings

Alabama 12,505 44% 56%Alaska 426 85% 15%Arizona 15,820 84% 16%

Arkansas 6,168 55% 45%California 105,468 74% 26%Colorado 13,101 83% 17%

Connecticut 4,250 90% 10%Delaware 1,685 71% 29%

District of Columbia 419 85% 15%Florida 40,291 76% 24%Georgia 30,267 53% 47%Hawaii 1,568 76% 24%Idaho 3,265 89% 11%

Illinois 32,135 77% 23%Indiana 17,222 75% 25%

Iowa 3,546 91% 9%Kansas 4,115 70% 30%

Kentucky 9,668 75% 25%Louisiana 7,001 35% 65%

Maine 1,548 85% 15%Maryland 11,509 80% 20%

Massachusetts 8,684 76% 24%Michigan 26,724 84% 16%

Minnesota 8,717 86% 14%Mississippi 5,677 59% 41%

Missouri 12,249 74% 26%Montana 1,083 83% 17%Nebraska 2,973 73% 27%

Nevada 10,410 77% 23%New Hampshire 2,206 76% 24%

New Jersey 16,967 80% 20%New Mexico 2,575 92% 8%

New York 21,338 85% 15%North Carolina 9,890 52% 48%North Dakota 572 91% 9%

Ohio 25,823 76% 24%Oklahoma 5,357 83% 17%

Oregon 7,548 80% 20%Pennsylvania 14,920 73% 27%Rhode Island 2,234 84% 16%

South Carolina 3,542 49% 51%South Dakota 838 91% 9%

Tennessee 19,480 52% 48%Texas 21,661 49% 51%Utah 8,044 66% 34%

Vermont 520 84% 16%Virginia 14,656 69% 31%

Washington 13,778 78% 22%West Virginia 2,212 88% 12%

Wisconsin 12,455 80% 20%Wyoming 622 83% 17%

Total States and DC 605,732 72% 28%

2011 YTD totals as of May. Continue reading for visual representations of state-by-state filings.AS OF MAY 2010; PER CAPITA FILINGS BASED ON ESTIMATED JULY 1, 2009 CENSUS; 1. PERCERNT CHANGE VS PREVIOUS YEAR

WORD PLAYHIGHLIGHTS FROM YTD BANKRUPTCY STATS


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NATIONAL BANKRUPTCY SERVICES

9441 LBJ Freeway, Suite 250 Dallas, TX 75243 1-800-766-7751

NBSdefaultservices.com

Call today to see how NBS can accelerate recovery through precision auto loan bankruptcy management services.

BANKRUPTCY IS NOT THE END OF THE ROAD.

Average age of a bankruptcy filerSOURCE: “AGING AND BANKRUPTCY REVISITED”

BY JOHN GOLMANT AND JAMES WOODS44.9BY THE NUMBERS


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CASE STUDY

CUSTOMER SERVICEA PATH TO SUCCESS

REGULAR/ON GOING INTERACTIONNBS dedicates a manager to each one of our clients. The Cli-

ent Liaison serves as a main point of contact and is responsible for ensuring that both the client and NBS’ operational staff stay up to date with any potential items that may arise.

The lines of communication remain open through regularly held meetings and status updates that are scheduled per the cli-ent’s request.

Regular performance reporting is also made available to our clients. Rather weekly, monthly, or quarterly we want our clients to stay informed as to the successes/struggles that their bankrupt accounts are facing.

Our clients also have access to their accounts via our client web portal. The web portal allows our clients to review their port-folio at anytime to see where the accounts stands and what work is current being performed on it. The web portal also provides a rolling snapshot of portfolio statistics ranging from open files to reaffirmation performance.

Through on going interaction with our clients, NBS strives to maintain a high level of transparency in regard to how our clients’ accounts are being processed.

KEEPING A FINGER ON THE PULSEAlthough we have already mentioned several key components

to our customer service approach, we must also keep an eye on what is going on not only with our clients but in the financial in-dustry as whole.

From a customer standpoint, we maintain a constant under-standing of our clients’ level of satisfaction through several dif-ferent methods, most importantly customer feedback. Often the client development/service team solicits feedback in regard to a multitude of items.

We do this to understand what our customers are satisfied with and what we can continue to improve upon. The feedback solicitation is a broad stroke that covers not only individuals at

the executive level, but all levels of employees at our clients. It is important to get feedback from everyone regardless of their spe-cific role within their organization.

Recently, NBS completed a Client Satisfaction surveys and be-low are some of the responses received:

• “I would strongly recommend NBS as a partner to handle Consumer Bankrupt accounts as an outside vendor.”

• “I would definitely recommend NBS. They have always been very attentive to our needs and a good partner.”

• “I would recommend NBS to my peers. They have been a reliable source for our bankruptcies.”

• “NBS is a pleasure to work with and is quick to answer questions and concerns we may have.”

• “I have recommended NBS several times to colleagues at other companies.”

From an industry standpoint, NBS maintains a high level of visibility within our sector’s conferences and seminar circuit.

Often we have representatives from NBS speak at the USFN, NACTT, and other various conferences each year through out the country.

Through participating in these types of events, not only do we maintain a strong voice within our industry, but we also are able to gauge the specific areas that individuals in the finance industry are struggling with.

In order for us to maintain a high level of customer satisfac-tion, we must stay in tuned with our clients needs. We can provide what we feel to be the best product in the world, but if our custom-ers don’t feel the same we are failing as a service provider.

At NBS we accomplish both goals as a servicer: We are experts in our field and provide great customer service. We achieve both through experience, hard work, and a dedication to protecting our client’s brand.

CUSTOMER SERVICE comes in many forms and can mean something different to everyone. For some of us it’s as simple as a smile from the barista that sells you your morning coffee or the electricity company actually being on time. We could go through thousands of scenarios similar to the ones above, but the most important to NBS is — what does customer service mean to our client and their customer?

At NBS, we understand that there is not a “cookie cutter” ap-proach to providing excellent customer service. We provide a per-sonal and fully customizable approach to keeping our clients sat-isfied with the services we provide. Our personal approach allows our staff the opportunity to get to know our clients and how they want their accounts and customers to be handled.

To ensure that we are providing the level of service that our industry demands, we focus on a few key points:

BUILDING THE BANKRUPTCY BUSINESS MODELAt the onset of any relationship, NBS takes the opportunity to un-

derstand not only the product(s) our clients provide, but the specifics to their situation. Is this institution a direct/indirect lender, what is their customer profile, what are their footprint states? Understand-ing our customers’ business profile helps NBS better understand some of the areas we can be most successful in helping with.

Once the customer profile is built, we work with our client to develop their individualized Statement of Work (SOW). Due to the specifics of each portfolio, we walk through this document in order to help our clients infuse their own internal practices into productive applications inside the bankruptcy environment. Through this process, we share with our clients a multitude of suggestions ranging from aggressiveness of reaffirmation solicita-tion to litigation threshold criteria. The SOW serves as NBS’ stan-dard operating procedure for each of our clients.

Although the SOW serves as a guide to processing accounts, it does not specifically address the potential interaction be-

tween NBS and our client’s customer. To ensure that we are treating the customer just as our client would, we develop a Customer Service document.

Given the nature of Bankruptcy, many of the individuals that contact NBS are facing difficult times, so we want to make their interaction with our staff as seamless as possible. The Customer Service document addresses potential questions ranging from payment addresses, surrender process, loss mitigation opportu-nities, and is specifically design in accordance with each of our client’s requests.

The SOW and Customer Service documents serve as guides for NBS to service not only our client’s accounts, but their customers as well. Simply put: NBS strives to treat our clients’ accounts and their customers in the same manner as the clients themselves.

KEEPING THE CLIENT INFORMEDAs with any servicing relationship, it’s important for both

sides to understand the industry in which the service is being performed. Due to its negative connotation bankruptcy training/knowledge is often over looked and under rated by those in the financial industry.

At NBS, we pride ourselves in not only our level of knowl-edge and experience, but our capability of passing the informa-tion along to others. Often our attorneys conduct Bankruptcy 101 classes with our clients to help them understand some of the account constraints they will face during the pendency of a bankruptcy.

In addition to the formal setting of a seminar, our attorneys send our regular communication to our clients to keep them abreast of law changes, appellate decisions, and current filing statistics.

This type of ongoing education/information is available to our clients at anytime. Keeping our clients informed of the industry that we are in is a top priority at NBS and helps us maintain a bet-ter servicing relationship.

BY WES WILEY

WES WILEY is the Director of Client Management at National Bankruptcy Services. Wes has been with National

Bankruptcy Service since 2008, and has been in the Bankruptcy industry for nearly 10 years. In his current role,

Wes is responsible for the oversight and development of current and prospective clients.


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HOT SEAT

Larry Buckley is the President and Managing Attorney of Brice, Vander Linden & Wernick, P.C. and the Executive Vice President of National Bankruptcy Services.

Mr. Buckley has been in the default servicing business since 1981. He is the former President and sole shareholder of Buckley & Associates, a default services processing company that he sold to First American Title Inurance company in 2003. He was sole shareholder and managing attorney of The Buckley Firm for over 20 years. Mr. Buckley was also President of First American Title Insurance Company’s National Default Title Services division from 2003 until 2005, when he joined NBS.

Mr. Buckley is a graduate of Pepperdine University School of Law and has been licensed to practice law since 1976. He is a member of the State Bars of Arizona, California, Colorado and Texas and numerous U.S. District Court Jurisdictions. He is AV rated by the Martindale Hubbell Law Directory.

THE LEDGER: Larry, what is your role at NBS?

LARRY J. BUCKLEY: I am the Executive Vice President respon-sible for business development and strategy at NBS.

THE LEDGER: How long have you been with NBS?

LJB: I have been with NBS for 6 years.

THE LEDGER: What was your previous experience before com-ing to NBS?

LJB: I have been actively practicing law since 1976 and have been involved in the representation of creditors in bankruptcy and oth-er matters since the early 1980s.

THE LEDGER: Tell me a little bit more about your existing role at NBS. What do you mean by business development and strategy.

LJB: Titles can be a bit vague sometimes. Because I have been in-volved in the default space for a long time, I have developed many relationships over the years with various people in the mortgage and consumer secured lender business.

I have been able to utilize those relationships to socialize what we do here at NBS and explain the advantages and challenges in out-sourcing a hugely important and complex process like bankruptcy administration and management.

From a strategy point of view, I participate with the other key ex-ecutives at NBS to develop our business and operating plans with a view toward our client and prospective client requirements.

For example, because technology has become so critical to default servicing, we focus on how we can best integrate with our clients’ systems so that we can provide complete transparency in the port-folio and at the individual case level. Reporting is a critical compo-nent of what we do for our clients as well.

THE LEDGER: Give us an example of some of NBS’s current tech-nology initiatives.

LJB: We have spent a significant amount of time and money de-veloping a software application that is designed to reconcile and provide posting advice for payments received in bankruptcy.

Because the systems of records used by our clients were not de-signed to post payments received from bankruptcy trustees and from debtors after having filed a bankruptcy case, many of our clients have struggled to ensure that payments are posted in ac-cordance with a confirmed plan in bankruptcy.

Our technology, Payment Analyzer, solves for this issue when we are provided with the client’s and the trustee’s payment transac-tion records.

Once this data is received, we are able to electronically analyze and provide payment posting advice to our clients to ensure that all payment posting is compliant with all bankruptcy court and rules requirements.

THE LEDGER: Based on your years in the default business, what do you see as some industry trends in the bankruptcy space?

LJB: The administration, management and litigation of bank-ruptcy cases is going to continue to receive increased scrutiny by bankruptcy judges, Chapter 13 Trustee’s, the U.S. Trustee’s Office and debtors’ counsel around the country.

Many of the issues that have made headlines regarding foreclo-sures are going to bleed over to bankruptcy.

There is already much greater scrutiny regarding the information contained in proofs of claim and affidavits and declarations in sup-port of motions for relief from stay.

This scrutiny is not going away and will likely increase as the fo-cus moves from foreclosure to bankruptcy. Issues regarding credi-tor- standing and the accuracy of information submitted in proofs of claim and in motions for relief from stay have already intensified.

THE LEDGER: In light of these trends, what should mortgage and consumer secured creditors being doing to ensure they are compliant and appropriately managing their risk?

LJB: The most important thing creditors can do to ensure compli-ance is to take a proactive approach in reviewing all of their exist-ing processes, both internally and with local counsel.

Merely responding to objections, Rule 2004 examinations by debt-ors’ counsel or the U.S. Trustee’s Office and other potentially ad-verse inquiries or actions will not be sufficient.

Taking a “deep dive” around all existing processes including data and document management is essential.

Even in a less confrontational environment than the one in which we are currently operating, bankruptcy processes should be regu-larly reviewed because of the inherent complexity. In these more challenging times, process review and implementation of im-provements is a must.

THE LEDGER: What do you suggest as a means of implementing this type of process review?

LJB: We have found over the years that taking a meaningful sam-ple of active cases and having those cases reviewed and audited by knowledgeable people outside of the existing operations group while using a detailed checklist approach for compliance and oth-er issues is a very useful effort.

We have performed such reviews for many of our clients as part of a consultative approach to identify opportunities to improve processes, identify key areas of risk and how to better manage in-ternal costs.

THE LEDGER: What is the best advice you can give to servicers managing significant populations of bankruptcy loans?

LJB: Know your processes, understand your risks , assume you will be highly scrutinized and take affirmative action to ensure you are doing everything possible to be compliant in all aspects of your servicing.

Up Close with Larry Buckley

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Taking a “DEEP DIVE” around all existing processes including data and document management is essential.


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OUR MISSION IS SIMPLE. We strive to improve the bot-tom line performance of our clients’ bankruptcy portfolios through careful, efficient and client-specific management of each individual case.

NBS provides nationwide bankruptcy management services to the following types of organizations:

* Residential Mortgage Lenders

* Automobile Finance Companies

* Banks and Financial Institutions

* Consumer Lending Organizations

* Portfolio Servicers, Owners and Investors

NBS is a leader in bankruptcy servicing for the consumer fi-nance industry. NBS is a subsidiary of Advent International.

ABOUT NBS

NATIONAL BANKRUPTCY SERVICES COMPANY NEWS

NBS NEWS DESKWWW.NBSDEFAULTSERVICES .COM

LATEST NEWSIN DEPTHDEFAULT COMPONENT SERVICINGNBS ANNOUNCES THE ADDITION OF TOM WATERSNBS recently welcomed Tom Waters as Vice President of Default Component Servicing. In this role, Tom will be fo-cusing on the development, implementation and enhance-ment of key client relationships.

Tom has over twenty-five years of experience working with banks, lenders and servicing groups in the Business

Process Outsourcing arena. Prior to coming to NBS, Tom served for eight years as Executive Vice Presi-dent at Dynamic Recovery Servic-es, a leading debt collection firm in Dallas, where he facilitated the expansion of client services, includ-ing data exchange, compliance and vendor management components as well as performance metrics.

When asked why NBS appealed to him, Tom says “In the course of my career I have been fortunate to work with hundreds of firms in an effort to improve their bottom lines via enhanced efficiencies and significant reductions of ex-pense. My association with the team at National Bankrupt-cy Services affords me the best opportunity to achieve these results for my clients. Our ability to address this critical component of loan servicing with a secure, compli-ant and unique suite of processes that reduces costs and drives performance is exactly what many lenders I have personally worked with have been looking for.”

Tom is also active in his community, supporting the Spe-cial Olympics of Kentucky, volunteering with Habitat for Humanity, and through his appointment to the Honorable Order of Kentucky Colonels. Tom enjoys spending time with his son, 16 year old Travis, and his three daughters Dallas 18, Madison 13, and Savanna 10. Tom’s wife, Holly, is the Senior Manager of Employee and Organizational Development with AEGON Corporate Division.

You can reach Tom at 972.643.6632 (office), 502.418.6802 (mobile), or by email at [email protected]

NBS TRADESHOW PRESENCENational Bankruptcy Services has had a growing presence at industry trade shows in 2010 and 2011. Most recently, NBS attended the CCN 6TH ANNUAL CONFERENCE in Half Moon Bay, and exhibited at the ROYAL MEDIA AUTO FINANCE RISK SUMMIT in Dallas in March, and the AFSA INDEPENDENTS CONFERENCE in Miami in April.

Attending, exhibiting and sponsoring these industry gatherings has proven to be a reciprocal success for both our internal servicing process and our grow-ing client base. Look for us next at CBA LIVE 2011 in Orlando and the 2011 LPS DEFAULT SERVICING CONFERENCE in Denver, and also as sponsors at CRS 2011 in Las Vegas in May and at the NACTT ANNUAL CONFERENCE in Anaheim in August.

NBS SYSTEM

CLIENT SYSTEM

PROOF OF CLAIM PROCESSING

» Verify Information Received Systemically

» Review Jurisdictional Requirements and Systemic Constraints

» Open Impediment as Needed

» Track and Clear Impediments

» Compile Proof of Claim

» Operational Quality Control Review

» Automatic Upload on Required Forms

» Attorney/Legal Review

» Electronic Filing

» Imaging and Archiving of Records

» Compliance Monitoring

» Client Website Interface offering Visibility into all processes

PLAN REVIEW

» Review Debtor’s Schedules, Statements and Plan

» Determination of Plan Treatment and Feasibility

» Identification of Plan Type

» Identify Abuse or Inadequate Treatment Issues

» Recommendation on actions on Inadequate Plan provisions, in conjunction with Jurisdictional Tables and Client Matrixed Authority

» Object or Litigate as Necessary

» Client Website Interface offering Visibility into all processes

TRUSTEE DATA

ELECTRONIC DOCKET MONITORING

COURT DATA

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RULES ENGINE

LASER FICHE

QUALITY CONTROL APPLICATION

DOC PREP

PACKAGE BUILDER

ELECTRONIC CASE FILING

NBS FAMILY REMEMBERS PAUL BOURKEPaul Henry Bourke passed away on June 19, 2011, Father’s Day, at the age of 65, at Galveston Island, a favorite place. He was born in Tullamore, Ireland, on Dec. 31, 1945, and spent most of his time on the golf course, where he excelled. He made Tullamore history when he set a new course record of 64, which stands today. He later immigrated to New York City and became the youngest vice president of a Federal Home Loan Bank in the 70s, and as-cended to COO/CEO of several companies, includ-ing NBS. He is survived by his wife, Cynthia Haynie; two children, three siblings and two grandchildren.

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