Repossessions are hard on so many levels. And that's exactly how Marina Hardy, Product Marketing Associate Director of Incorporators.com, Inc Lien Solutions, introduced the complimentary webinar titled "Auto Repossessions Avalanche is Coming: Are You Ready?" Other participants in this informative seminar included Mark S. Edelmen, Chair of the McGlinchey Stafford Consumer Financial Services practice, and Rick Vanko, Senior Product Manager of Incorporators.com, Inc.

As experts in repossession titling and processing, our team at Incorporators.com, Inc Lien Solutions hopes to use this presentation as an opportunity to support and educate lenders faced with today's challenging business environment. We understand the pressure and complexity of dealing with various jurisdictional requirements, rapid spikes in defaults, and typically, urgent deadlines. Our Lien Solutions repossession titling process removes the burden of an error-prone and time-consuming process. Our clients can more easily adapt to changing conditions during the coronavirus pandemic and emerge stronger even after the crisis has passed.

Economic drivers of repossessions

To understand the economic drivers of the rise of repossessions and the struggles that lenders have faced, the seminar emphasized the importance of considering factors related to both changing consumer behaviors before coronavirus and of course, the disruptive impact of the pandemic.

Pre-pandemic issues

Before the pandemic, lenders struggled with a complex repossession process that varied by state. Also, even in the last quarter of 2019, before the COVID-19 pandemic, the lending industry coped with increasing defaults, mostly credited to over-extended borrowers.

Direct coronavirus triggers

In January of 2020, states began reporting their first coronavirus patients, and in early February, California claimed the first death. By late March and early April, governments ordered the first stay-at-home and shutdown orders. By May of 2020, 18 million people fell behind on auto loan and credit card payments as businesses shut down and unemployment rose. To relieve the burden on consumers, state governments offered some relief with a temporary repossession moratorium. By now, these repossession moratoriums have already expired, though some states might extend these waivers through executive orders.

Consumer behavior changes

Also, the nature of this economic downturn changed consumer behavior and priorities. As an example, businesses have sent millions of employees home to work remotely. Without a commute, these workers may not prioritize keeping a second car or in some cases, even a first one.

Avoiding repossession pitfalls

In the face of rising defaults, just a few obstacles that lenders face include:

• Rapidly changing state laws: Though the original moratoriums have expired, some states can extend consumer relief at any time through such abrupt measures as executive orders.
• The mobility of collateral: Unlike most forms of collateral, cars can move along with their owners when they seek new job opportunities. In general, lenders need to follow the law of the jurisdiction where they repossess the vehicle and not that of the original purchase state.
• State-specific laws and forms: States set repossession laws, so lenders have to deal with dozens of local regulations and sets of forms. Even though no general federal repossession law exists, lenders also need to consider federal relief measures for active-duty service members.
• Loan deferral processes: Because of the economic downturn, lenders may offer additional deferrals, extensions, and other loss-mitigation measures. While displaying some flexibility can prove cheaper and present a better public image than taking a hard line, lenders must ensure that their system can handle new processes.

How lenders adapt to pandemic conditions and a complex, uncertain future

Here at Incorporators.com, Inc, we can offer lenders a better way to deal with loan processing. Learn why today's agile, transparent, and compliant lenders rely on us for repossession titling. Also, be sure to take a few minutes to view our free seminar on the repossession avalanche so many lenders face.