“The Role of the Field Agent” - The Association of Arrears Mediators

“The Role of the Field Agent” CML Arrears & Possessions Conference Thursday 17th February 2011 Midland Hotel – Manchester Ray Hugill Chairman The Association of Arrears Mediators

“The Role of the Field Agent” Contents What do lenders use Field Agents for? Why is this work outsourced? What do lenders expect of Field Agents? What report will be produced by Field Agents? Regulatory/Legislative requirements Other benefits delivered Who is the Association of Arrears Mediators (AAM)? Why was AAM established? Membership of AAM Statistics The future

“The Role of the Field Agent” What do lenders use Field Agents for? Post completion Arrears (pre-litigation) Arrears (post Court Order) Arrears (pre-eviction) Occupancy checks Property inspections Buy to Let inspections Assisted Voluntary Sales Document/letter delivery

“The Role of the Field Agent” Why is this work outsourced? Typically the lender has failed to make contact with the borrowers The relationship between the lender and the borrowers may have broken down The borrowers may be in denial, frightened or angry Home visits put borrowers at ease – likely to feel more comfortable and “in control” in their own surroundings A visit maximises the service delivered to borrowers Quick and efficient – prevents cases deteriorating Cost effective – delivers genuine value for money Geographic coverage across the UK and Ireland Lack of lender resource and experience

“The Role of the Field Agent” What do lenders expect of Field Agents? A partnership approach The Field Agent to be an extension of the lender’s customer service proposition The Field Agent becomes the “eyes and ears” of the lender Provides a comprehensive breakdown of the borrower’s financial situation The Field Agent’s report will allow the lender to determine the most appropriate outcome The meeting with the borrowers aims to gather/impart information aimed at allowing the borrowers to remain in their homes

“The Role of the Field Agent” What report will be produced by Field Agents?

The report is likely to include: > A summary of the visit > The reason for the arrears > Any issues identified by the borrowers > An Income and Expenditure breakdown > Any sustainable proposals for future payments > A property report (and high level valuation) > A photograph of the property > Details of any tenants (either Buy to Let approved or unauthorised) > Confirmation of any original documents inspected

“The Role of the Field Agent” Regulatory/Legislative Requirements

Part of any lender’s arrears policies (forbearance) Pre-action Protocol (prevention of litigation)

Possession as a last resort (FSA & MCOB 13) Treating Customers Fairly (every borrower should be in a better position after speaking with a Field Agent – even if only better informed) Helps (where possible) to achieve a sustainable solution for each INDIVIDUAL case Transparency of both fees and processes

“The Role of the Field Agent” Other benefits delivered

May help to prevent possession (and subsequent losses/bankruptcy) Signposts borrowers to other agencies (maximisation of state benefits)

Signposts borrowers to Mortgage Rescue Schemes Ultimately helps to repair the relationship between lenders and borrowers Key Management Information

Best practice (aligned to the Association of Arrears Mediators)

“The Role of the Field Agent” Who are the Association of Arrears Mediators (AAM)?

A Trade Association for the arrears mediation sector (Field Agents/Counsellors) Established in December 2009

Five founder members responsible for circa 90% of all Field Agents visits within the sector: > DMS > Excel > NCI > PDP > PSP

“The Role of the Field Agent” Why was AAM established? Create and maintain high quality professional standards and best practice to help our members support their lender clients Ensure that our services are consistent with guidelines issued by the FSA and other regulatory bodies Achieve recognition as the recognised Trade Body within this sector Increase confidence from lenders, borrowers and regulators Member benefits Lobbying Sector information Technical research

“The Role of the Field Agent” Membership of AAM Any Field Agent Company can apply to join AAM subject to fulfilling the following criteria (audited prior to becoming a member): > Have a written Code of Conduct for all employees and agents > Provide full training programmes for all employees and agents > Verify employment details of all employees and agents including criminal record checks > All self employed agents to hold a valid Consumer Credit License > All agents to sign up to the AAM Code of Conduct > All agents to complete an induction programme > Have in place a robust Complaints Procedure > Have in place a TCF policy > PI cover in place for a minimum of £1m (unless the lender requires a higher sum) > Have carried out Field visits for a minimum of two years > Have in place a money laundering policy Audits are carried out by the Chairman of AAM

“The Role of the Field Agent” Statistics (1) Between 2007 and 2010: > 615731 – Pre-Litigation visits completed > 114535 – Pre-Eviction visits completed

“The Role of the Field Agent” Statistics (2)

Pre-litigation visits in H2 2010: > 35% - Full fact find and arrangement > 16% - Cancelled > 14% - No contact > 12% - Refusal > 9% - Skip > 9% - Tenanted > 5% - Full fact find with no arrangement Net controllable visits – 65%

“The Role of the Field Agent” Statistics (3) Pre-Eviction visits in H2 2010: > 27% - Full fact find and arrangement > 23% - Skip > 14% - No contact > 11% - Tenanted > 10% - Full fact find with no arrangement > 8% - Refusal > 7% - Cancelled Net controllable visits – 66%

“The Role of the Field Agent” The Future Field Agents will continue to play an important role in the arrears and possessions process Working together will avoid many homes needlessly being repossessed AAM is looking to expand our relationships with key players – lenders, FSA, CML, BSA etc. Fees/service will increasingly be under the spotlight Feedback from lenders is vital

Thank you all for listening – any questions?

www.arrearsmediators.org.uk