Debt Resolve Launches Subprime Mortgage and Auto Loan Collections Tool

Debt Resolve, Inc. announced today the launch of DR–Default, an online tool for collecting defaulted mortgage and automobile loans. With DR–Default, creditors can invite their customers to a safe, secure and easy-to-use website where they are presented with options to pay or settle their defaulted mortgage or automobile loan.

DR–Default was created in response to the rising default rate in subprime loans. It enhances Debt Resolve’s other products for collecting credit cards, student loans, utilities, and other types of consumer debt. DR–Default is easily integrated into clients’ collection systems. In addition, clients may authorize collection agents to use this product, or place their accounts with Debt Resolve’s wholly-owned collection agency, First Performance Corp. First Performance is experienced in collecting defaulted mortgage and subprime debt.

Last year, 13.5 percent of mortgages originated in the U.S. were subprime (up from 2.6 percent in 2000), according to the Mortgage Bankers Association. The total subprime market accounts for approximately 20 percent, or $600 billion, of the $3 trillion mortgage market. It was reported that more than 43 million loans were outstanding at the end of 2006. The total number of delinquent mortgages has increased to approximately $150 billion.

Auto finance is the second largest consumer credit industry in America. Federal Reserve analysts estimate that the subprime auto market has quadrupled over the past decade, up to $65 billion in loans from approximately $15 billion. However, some lenders in the industry have estimated that the subprime auto finance industry is reaching $125 billion a year.

James Burchetta, Debt Resolve Chairman and CEO said: “It is our experience that banks and other lenders want to treat their customers fairly and are concerned about the rising default rates. DR–Default will allow debtors to access a secure website to pay and settle their defaulted debt, and in some cases, receive alternative options to cure the default. DR–Default will assist in containing the damage caused by the recent increase in defaults within the subprime market.”