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Anyone read Bad Paper?


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Currently reading above mentioned book, about a quarter of the way through. Anyone else read this? So far it was interesting to see some actual dollar figures placed to what portfolios of debt are sold for, and what CA's (through various tactics, including really scummy and illegal) are averaging on profit. I know that it violates their agreement with the CRA's but if I opened a CA, I would PFD all day long for these profit margins. It's not like you have to be very creative to fly under the radar with it. You can be totally compliant with FDCPA and still make a killing, even factoring in all the uncollectable debts that will be included in a package. Just wondering out loud why CA's put up such a fuss when their end game is profits. Rhetorical.

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Yes, for example in the very first deal he did, he bought a portfolio of "paper" for $30k, worked it for 4 months, collected around $80k, then sold the rest of the paper he wasnt able to collect on for $10k. So he ended up with $60k in profit from the paper (excluding bonuses, etc paid to collectors) in 4 months time. Not shabby. What I found interesting was the going rate for buying these portfolios. The time frame that I am in the book, he is paying $.01 on the dollar for "paper" that has been sold/worked more than once. The going rate for "fresh paper" i.e. recent charge offs purchased directly from the bank was only 3.5 cents on the dollar.

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I've been thinking recently about the fact that 30k can buy out 100k in actual debt, probably more. Why hasn't a non-profit come along with the sole purpose of buying this bad debt and burning it up? Start at the very bottom with the really beat up leads, buy up all that garbage and get it off the streets.

 

I can't wait to read this. Going to Leavenworth this weekend so I'll have some time to start it.

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I've been thinking recently about the fact that 30k can buy out 100k in actual debt, probably more. Why hasn't a non-profit come along with the sole purpose of buying this bad debt and burning it up? Start at the very bottom with the really beat up leads, buy up all that garbage and get it off the streets.

 

I can't wait to read this. Going to Leavenworth this weekend so I'll have some time to start it.

 

I recall some folks that came out of OWS were doing just that for a while. Don't remember anything much coming of it though. There were some posts on CB about it.

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Yes, for example in the very first deal he did, he bought a portfolio of "paper" for $30k, worked it for 4 months, collected around $80k, then sold the rest of the paper he wasnt able to collect on for $10k. So he ended up with $60k in profit from the paper (excluding bonuses, etc paid to collectors) in 4 months time. Not shabby. What I found interesting was the going rate for buying these portfolios. The time frame that I am in the book, he is paying $.01 on the dollar for "paper" that has been sold/worked more than once. The going rate for "fresh paper" i.e. recent charge offs purchased directly from the bank was only 3.5 cents on the dollar.

 

That's consistent with what I've run across in 10Ks.

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I have to share this excerpt:

 

"Tom ran a collection agency staffed largely by born again Christians, whom he sometimes recruited at Bible study groups. Tom's collectors called debtors, listened to their woes, cried with them, prayed with them, and told them they only had to pay 20 percent of the principal they owed - moreover, 20 percent of what they paid would go to a Christian charity that helped feed the poor. In the test run for this program, Tom bought a portfolio of debt for $7,000 and collected $180,000 on it in roughly 60 days"

 

That's actually pretty brilliant.

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I have to share this excerpt:

 

"Tom ran a collection agency staffed largely by born again Christians, whom he sometimes recruited at Bible study groups. Tom's collectors called debtors, listened to their woes, cried with them, prayed with them, and told them they only had to pay 20 percent of the principal they owed - moreover, 20 percent of what they paid would go to a Christian charity that helped feed the poor. In the test run for this program, Tom bought a portfolio of debt for $7,000 and collected $180,000 on it in roughly 60 days"

 

That's actually pretty brilliant.

 

 

What a pitch! I wouldn't take any bets on whether any of that moolah made it to any charity other than his favorite one. OTOH, visibly doing it might prove motivational to this set of collectors.

Edited by cashnocredit
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I have to share this excerpt:

"Tom ran a collection agency staffed largely by born again Christians, whom he sometimes recruited at Bible study groups. Tom's collectors called debtors, listened to their woes, cried with them, prayed with them, and told them they only had to pay 20 percent of the principal they owed - moreover, 20 percent of what they paid would go to a Christian charity that helped feed the poor. In the test run for this program, Tom bought a portfolio of debt for $7,000 and collected $180,000 on it in roughly 60 days"

That's actually pretty brilliant.

 

 

What a pitch! I wouldn't take any bets on whether any of that moolah made it to any charity other than his favorite one. OTOH, visibly doing it might prove motivational to this set of collectors.

Oh, I think that it got to a charity. The Human Fund.
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I have to share this excerpt:

"Tom ran a collection agency staffed largely by born again Christians, whom he sometimes recruited at Bible study groups. Tom's collectors called debtors, listened to their woes, cried with them, prayed with them, and told them they only had to pay 20 percent of the principal they owed - moreover, 20 percent of what they paid would go to a Christian charity that helped feed the poor. In the test run for this program, Tom bought a portfolio of debt for $7,000 and collected $180,000 on it in roughly 60 days"

That's actually pretty brilliant.

 

What a pitch! I wouldn't take any bets on whether any of that moolah made it to any charity other than his favorite one. OTOH, visibly doing it might prove motivational to this set of collectors.

 

Oh, I think that it got to a charity. The Human Fund.

 

 

Lol

Edited by cashnocredit
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I have to share this excerpt:

"Tom ran a collection agency staffed largely by born again Christians, whom he sometimes recruited at Bible study groups. Tom's collectors called debtors, listened to their woes, cried with them, prayed with them, and told them they only had to pay 20 percent of the principal they owed - moreover, 20 percent of what they paid would go to a Christian charity that helped feed the poor. In the test run for this program, Tom bought a portfolio of debt for $7,000 and collected $180,000 on it in roughly 60 days"

That's actually pretty brilliant.

 

What a pitch! I wouldn't take any bets on whether any of that moolah made it to any charity other than his favorite one. OTOH, visibly doing it might prove motivational to this set of collectors.

Oh, I think that it got to a charity. The Human Fund.

 

 

+1.

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Yes, for example in the very first deal he did, he bought a portfolio of "paper" for $30k, worked it for 4 months, collected around $80k, then sold the rest of the paper he wasnt able to collect on for $10k. So he ended up with $60k in profit from the paper (excluding bonuses, etc paid to collectors) in 4 months time. Not shabby. What I found interesting was the going rate for buying these portfolios. The time frame that I am in the book, he is paying $.01 on the dollar for "paper" that has been sold/worked more than once. The going rate for "fresh paper" i.e. recent charge offs purchased directly from the bank was only 3.5 cents on the dollar.

How much did it cost for the offices and other facility costs, utilities, phones, direct and indirect employee compensation, payroll taxes, blahblahblahblah? Sure, in this business some of the employee stuff was under the table, but the point remains...

 

I've noticed that my employer doesn't get to keep all of their gross profit, because they have those and many other pesky expenses.

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