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JessDarrell Musick

#	To	From	To#	Message
1	Audience	Debt Trader		Welcome members to our first online chat discussion. The discussion will start shortly.
2	Audience	Alan DeHaven	1	We are bidding on our first portfolio. When we are looking at paying for documentation costs of $5.00 per affidavit and $5.00 per history, how much should we add to our cost per 1,000 accounts purchased for these "ala carte" charges.
3	Audience	The Debt Trader		The host has arrived and is ready to answer any questions. Wlecome.
4	Alan	Darrell Musick	2	In your contract, you should have a period for free documentation up to 10-20 percent of the accounts.
5	Alan	Darrell	2	The industry standard is generally 60 to 90 days.
6	Darrell	Jess		What are the steps in doing due diligence?
7	Darrell	Jess		How do I know that the buyer isn't selling the same package to everyone else?...and taking the money and disappearing?
8	Darrel	Perry Mason	6	How long does it take to close a deal?
9	Jess	Darrell Musick	6	There are many. Verification of source, chain of title, verification and completeness of information (i.e. Banko, Social Security checks), portfolio analysis (phone numbers, geographical analysis), and initial credit granting criteria top the list.
10	Audience			what scoring methods do people use?
11	Jess	Darrell Musick	7	Your first step in due diligence is to know your seller. Without that relationship, you increase your risk.
12	Perry	Darrell Musick	8	If it's the first time that you've dealt with someone, it could take as long as 2 or 3 weeks. After that, things can generally be wrapped up within a week.
13	Darrell	Charles	6	That was a very good question that Jess asked and it should be of concern to everyone. I'm a VP with a large financial institution and we've been discussing the prospects of a registry for portfolios. What do you think of this idea?
14	Audience	Darrell Musick	10	All scoring models are designed for the particular client that requested the model. The models and their respective criteria vary from person to person.
15	Charles	Darrell Musick	13	Welcome, Charles. We are working with several major financial institutions in developing a much-needed product for this industry to protect both buyer and seller.
17	Darrell	Jess		I probably sound a little green and I am regarding the debt industry, but it seems that this industry is currently unregulated as compared to say, the R.E. industry.
18	Audience	Darrell Musick		For those of you who are not familiar with the Debt Buyers' Association, I suggest that you join. This organization is set up to build standards for our industry, enact a code of ethics, and educate members.
19	Audience			is anyone currently using any zip code affluency software to score. if so, what can i expect to pay for such software
22	Audience	tcs		How often can you expect to receive previous cash flow information from sellers?
23	Jess	Darrell Musick	17	You're exactly right! I think I jumped the gun with my last statement. The Debt Buyers' Association is the forum for industry "self-regulation" .
24	Audience			Is the association doing anything to make the due diligence process any easier for the prospective buyer?
26	Audience	Debt trader	20	HOW TO USE THE CHAT. If you would like to ask a question enter the text in the "question text box". If you would like to reply to a particular question use the "answer text box", then indicate wich line you are addressing by entering the "line#" (located on far left column of chat). Enter the "to" and "from" accordingly. Thanks.
27	Audience			Can anything be done to weed out the bad apples in the indusrty?
28	Audience	Darrell Musick	19	Zip code analysis is often used in the analysis of portfolios. I, for one, am not aware of any specific software for this purpose.
29	Audience	Alan DeHaven		If I'm looking at two portfolios of zero agency paper and one has an avg c/o date of three months and the other has an avg c/o date of nine months, are there any tables or standards to predict the differing recovery rates between the two portfolos.
31	Audience	Darrell Musick	24	Chat sessions like this, coupled with educational conferences and industry newsletters provide the education needed to make quality decisions with regards to the due diligence process.
33	Darrell Musick	Jeff		Can anything be done to weed out the bad apples in the industry?
34	Audience	Darrell Musick	27	The Debt Buyers' Assoc.'s standards of ethical conduct help ameliorate this situation.
35	Audience	Darrell Musick	29	Not based on charge-off dates alone.
36	tcs	Darrell Musick	22	Usually upon request, but not always.
37	Darrell Musick	Jeff		Do you have any suggestions for someone new in the business?
38	Jeff	Darrell Musick	37	My first suggestion would be to study the industry, attend conventions, read as much as you can about the industry, and decide if it is indeed the industry for you.
39	Jeff	Darrell Musick	37	...and don't invest any money until AFTER you've done all of the relevant due diligence!
40	Darrell Musick	Alan DeHaven		Point well taken. But I have seen statistics stating that debt is 75% collectable after 90 days and detiorates to 10% at one year. Are there established or acceptable standards to apply to the c/o date age difference?
41	Alan	Darrell Musick	40	This has not been our experience, but there is a direct relationship between age and collectability. Many factors come into play, such as collection effort PRIOR to charge-off by the Seller, collection efforts SINCE charge-off of your own, and the price paid for the paper.
42	Alan	Darrell Musick	41	Older paper can be as profitable as newer paper if the right price is paid.
43	Alan	Darrell Musick	42	With older paper, collection efforts might be harder and can take a lot longer, but the end results can be equal.
44	Alan	Darrell Musick		The Nilson Report, a leading publication in our industry, reports the most recent statistics. However, they are averaged from many sources and may not reflect your actual results.
45	host	P. Bartlet		How do I do due diligence (verify the accuracy) the "placement " of a portfolio I'm seeking to purchase?
46	Darrell Musick	Alan DeHaven		Is most of the due diligence done on smaller portfolios of debt, say $2,000,000, done over the phone and e-mail or should I be doing on-site due diligence as well?
47	P. Bartlet	Darrell Musick	45	Ask for "Chain of Title" on your portfolio, then verify with the previous owners what activity took place.
48	Darrell	Frank	42	In your opinon what is the best type of paper?... generally speaking. (i.e. auto, credit card, consumer, prime, 2nds, etc.)
49	Alan	Darrell Musick	46	Good question. This was a topic of discussion at the recent DBA conference. Always visit your seller if possible PRIOR TO SALE to develop a comfort level that works for you. This gives you the chance to ask questions, see their operations, and verify that they haven't set up shop in the back of a '57 Chevy!,
50	Darrell	Frank		Do you deal directly with prime institutions and then resell some?
51	Frank	Darrell Musick	48	First determine what you and your agents are best at collecting.
52	Frank	Darrell Musick	50	Yes.
53	Darrell Musick	Jeff		Do you find that paper from one institution is consistently better than others?
54	Darrell	John lk.		Peronally, what are the first 3 things you would do when reviewing a potential portfolio?
55	Jeff	Darrell Musick	53	Yes, but you must follow the corporate credit granting criteria, as it changes from time to time.
56	Darrell	Kris Martin		It seems like more and more large institutions are getting involved. Where do you see industry moving?
57	John	Darrell Musick	54	We have actually developed a proprietry, in-house system for analyzing potential purchases. This follows the appropriate due diligence on the seller.
58	Kris	Darrell Musick	56	1998 Bad Debt Sales approached approximately 25 billion, and 1999 sales were at around 30 billion. 2000...35 billion?
59	Kris	Darrell Musick	58	The growth of the credit card's popularity and wide-spread acceptance of it as a method of payment (i.e., paying taxes with cards, DMV accepting it for paying fees) all contribute to the growth of the Debt Buying Industry.
60	Darrell Musick	Alan DeHaven		Is there an consensus opinion as to how the rising interest rates are going to effect price and bad debt sales?
64	Darrell Musick	Jeff		Are there any printed materials that can help me with due diligence procedures?
65	Alan	Darrell Musick	60	Higher interest rates cost the sellers more money to carry bad accounts, thereby increasing debt sales.
66	Audience	Jess		Whats envolved in purchasing directly from the financial institutions?
67	Jeff	Darrell Musick	64	Since you have Internet access, I recommend visiting sites like Faulkner & Gray, The Debt Marketplace, The Nilson Report, and any other industry publications or collectors' magazines to get the information that you need.
68	Darrell Musick	Jeff		Thank you.
69	Jess	Darrell	66	The three most important things that a financial institution is interested in are: 1)Your history and reputation, 2)Your collector's history and reputation, 3)and the balance available in your checkbook
70	Darrell	Mitch		How can we contact you directly? I have some portfolio business I would like to discuss with you.
71	Darrell	Jess	66	How large does that checkbook figure have to be?... in general.
72	Mitch	Darrell Musick	70	Our number is 1-800-954-8700 and I can also be reached at darrell@securityasset.com. Thanks.
73	Audience	Darrell Musick	71	It depends on the size of the financial institution, but my experience has been $100K plus.
74	Audience	Darrell Musick		Thanks for signing on. If you have any further questions or need clarification, you may contact me directly.
75	Audience	The Debt Trader		Darrell, we would like to take this time to thank you and all the members that attended and participated in this session. Is there any thing else you would like to add before we conclude?
76	The Debt Trader	Darrell Musick		Just "thank you again".
77	Audience	The Debt Trader		Darrell, would you be available for any future sessions if requested?
78	The Debt Trader	Darrell	77	Yes I would, and thanks again.
79	Audience	The Debt Trader		This concludes the first sesson on "Due Diligence and Packaging." We will be announcing our next chat with a few weeks. And remember, a transcript of this session will be available for your review at member services. Thanks to all.