Like bartenders and psychologists, distressed debt servicers spend the day listening to people’s problems.

To be considered good at these jobs, you would need to be able to give solid advice to help people with their issues. The key word to mastering the craft is “listen” and doing so effectively takes a great deal of time and a trained ear.

In order to find the optimal solution for a struggling borrower, a servicer should be spending time to fully understand the issue the borrower is dealing with.

For example, an account manager recently went through the borrower’s extensive personal budget analysis (which covers not only debt seen on credit reports but other expenses) and found out that the borrower could afford a modified payment.

The borrower was still deeply underwater, and there would not be anything left at the end of the month for savings. The borrower also explained that he was planning on retiring in 10 years. The account manager had noted that the borrower did not have any savings and planned to live off of Social Security benefits when he retired.

Then, the account manager told the borrower about his potential modification but also asked if he had considered downsizing based on their discussion. After reviewing some basic math and having the account manager help him find a less expensive rental in his town, the borrower recognized he could retire with a nest egg if he just downsized and avoided defaulting on the loan.

This is not revolutionary but it is a matter of listening and identifying the issues and working on solutions based on those issues.

The best way to find out the issues that borrowers are dealing with is to ask open-ended questions and listen. It is also important to spend a great deal of time with your staff to help them understand the big picture with your borrowers. Talk to your borrowers about their spending habits, priorities and their financial goals.

The last and equally important part of this approach is to have the dedicated and highly skilled staff necessary to execute the strategy. The best way to keep and motivate your staff is to make sure they recognize that what they are doing is truly helping borrowers.

Instead of hiring collections representatives, hire account managers who have the knowledge and ability to make a real difference in people’s lives. A borrower recently sent us a picture of her family with a letter that says, “I am still speechless and truly do not know what to say, but thank you.

Like I had said on the phone, it is amazing that we will most likely never meet you, and you have had such a tremendously positive impact on our lives. So I have attached a picture of our family to ‘put a face to the family’ that you have given hope to.”

Letters like these make people feel great about what they do, and is that not what we should all be working for?


Ed Fay is the founder and chief executive officer of Chicago-based Fay Servicing, a special servicer that specializes in distressed and at-risk residential mortgages for banking institutions and alternative real estate investors. For more information, please visit