1. Finding Value in Selling Tax Liens
#NTLAANNUAL17
Finding Value in Selling Tax Liens
Presenters:
Jan Stieger, Executive Director, Receivables Management Association
Adam Parks, Chief Acquisition Officer, Investment Retrievers
© 2017 National Tax Lien Association

2. The Decision to Sell Accounts
Benefits of selling accounts
Accelerated and predictable cash flow
Proceeds of sales immediately available
Reduced long term collection and recovery costs
Account portfolio sale methods
Bulk sales – grouping pools of accounts
Forward flow agreements – set price transactions over pre- determined period of time
© 2014 National Tax Lien Association

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4. Benefits to Government
Receipt of immediate cash for delinquent taxes
Certainty of cash flow to improve future budgeting
Transfer potential liabilities for nonpayment of tax
Increase revenues without having to raise taxes or increase public debt
Decrease delinquency rates
© 2014 National Tax Lien Association

5. © 2014 National Tax Lien Association www.theNTLA.com
Benefits to Taxpayers
Decreased risk of future tax increases
Reliable funding for government programs
Assurance that everyone will pay his/her fair share
Privatization of government functions
Protect property values by improvement of blighted properties
© 2014 National Tax Lien Association

6. Benefits to Delinquent Taxpayers
Redemption time period is unchanged or extended
Interest rate often less than statutory rate
Payment plans may be established by the lien purchaser
Statutory protections continue after lien sale
Collection and notification procedures controlled by state statutes
Localized expertise of lien purchaser
© 2014 National Tax Lien Association

7. Account Age / Pricing Ratio
Example Account Value
Time Since Delinquency
© 2014 National Tax Lien Association

8. General Debt Pricing Factors
Asset Type
Secured vs Unsecured
Borrower Type
Consumer vs Business
Credit Grade (A-D)
Demographics (Age, location)
Borrower Frequency
Account Balance
Principal
Interest/Fees
Forgiveness/Settlement Offers
Other
© 2014 National Tax Lien Association

9. General Debt Pricing Factors
Collection Treatment
Collection treatment prior to account sale
Percentage of accounts requiring skip tracing
Amount of asset verification
Any accounts litigated, settled, or judgments obtained
Communications to account holder
Account Integrity
Quality of documentation
Accuracy of balances
Detailed payment history
Age of Account at Point of Sale
© 2014 National Tax Lien Association

10. Documentation Requirements
FTE needed to Support Process
Documentation Provided Upfront or on a Per Request Basis
Cost of the Documentation Process
Documentation Process & Availability has Direct Effect on Pricing
© 2014 National Tax Lien Association

11. CFPB Has Changed the Process
Due Diligence! – Due Diligence! – Due Diligence!
Required Account Documentation
Focus on Data Integrity
Account data elements needed
Secure data transfers and element mapping
Vendor Management
Dispute management process
Vendor due diligence & auditing
UDAAP (Prohibition of Unfair, Deceptive or Abusive Acts or Practices)
© 2014 National Tax Lien Association

12. Selecting Debt Buyers to Bid
Reputational Risk
Best Practices and Industry Standards
Large vs Small Buyers – Local / Regional / National
Local area and event knowledge
Specialized processes and systems
Certified Receivables Management Companies
Held to higher standard
Participate in ongoing education
Independent 3rd party audits conducted
© 2014 National Tax Lien Association

13. Latest in Purchase & Sale Agreements
Representative and Warranty Clauses
Guidance on Work Standards
Guidance on Legal Strategy
Guidance on Post-Sale Communications
Correspondence exchange
Payment communications
Regular compliance/financial audits
© 2014 National Tax Lien Association

14. Vendor Management Policies and Procedures
Vendors are an Extension of Your Business
What Happens to Accounts Post-Sale
Resale – Limited to Certified Companies
Insuring Data Security and Integrity
Post Sale Support
Account documentation (media)
Direct payment processing
Correspondence
© 2014 National Tax Lien Association

15. © 2014 National Tax Lien Association www.theNTLA.com
Q&A Discussion
Complimentary Originating Creditor Membership
RMA offers complimentary membership to creditors (application is required). Membership in the association provides access to other members, timely communication on regulatory changes and trends in the industry, online and in- person education and discounts to RMA International conferences and education.
© 2014 National Tax Lien Association