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Convenient new financing option builds payments directly into consumer utility bills, driving reduced delinquencies.

How can states harness the power of clean energy to make it a reality for their residents? There isn’t an easy answer to this question. But the New York State Energy Research and Development Authority (NYSERDA) was established to help the Empire State find a path forward. It strives to reduce greenhouse gas emissions, accelerate economic growth and decrease consumer energy bills by advancing the use of renewable energy sources. 

Concord’s relationship with NYSERDA dates back to 2010, when we began servicing Smart Energy loans for the organization. Since then, NYSERDA’s consumer energy financing program has grown dramatically. Residents now have several options to help them finance their energy efficiency and renewable energy home improvements. And as NYSERDA’s financing program has grown, so has its relationship with Concord. 

An On-Bill Recovery loan pioneer 

Concord helped NYSERDA add an innovative new component to its suite of energy financing options: On-Bill Recovery (OBR) loans. OBR loan payments are built directly into consumers’ utility bills, providing a fast and convenient way for them to make monthly payments. OBR loans are structured like Smart Energy loans. However, monthly loan payment amounts may not exceed the estimated average monthly energy cost savings. OBR loans also require cooperation with the borrower’s utility provider.

“Concord is a pioneer in On-Bill Recovery loans, with extensive experience implementing these programs in the energy industry,” said Shaun O’Neill, President & Chief Revenue Officer at Concord. “We know how to work with utilities to create the best possible program, and how to support effective customer relationships to maintain it and foster growth.”

Delinquency and default rates tend to be lower with OBR loans because the payments are built directly into consumers’ utility bills. They can be a great fit for organizations looking to offer increased flexibility and convenience for consumers, while minimizing portfolio risk. OBR loans also give utility providers a unique opportunity to build stronger relationships with their customers throughout the loan repayment process. 

“NYSERDA’s goal is to help support New York lenders and residents to advance clean energy projects that reduce greenhouse gas emissions and improve air quality,” said John Joshi, Director of Financing Solutions, NYSERDA. “Partnerships like the one we have with Concord shows how public and private collaboration is critical to driving this effort, and it serves as a model for how other states can tackle climate change and reach their clean energy goals, as well.” 

“NYSERDA is a trailblazer in the clean energy movement,” said O’Neill. “With innovative programs like On-Bill Recovery loans, Concord can provide the critical financing options needed to help advance the organization’s objectives and give New Yorkers the financial tools they need to support a clean energy future.”

Our unique loan servicing approach 

Concord delivers compliant, flexible, and scalable loan servicing solutions to meet the demands of loan originators and capital providers – and their customers. Professional loan servicing is critical to ensure that proper compliance, security, administrative and reporting needs are met. And our proven collections approach helps maintain portfolio performance and ratings agency confidence. 

What makes us uniquely suited to serve energy financing needs? Our deep expertise in these critical areas:

• On-Bill Recovery – we can provide customer-friendly and convenient energy loan payments directly on utility bills.
• Deferred Interest and ITC Program Financing Options – we support flexible financing products with ITC buydowns and re-amortization.
• Contractor and Installation Escalation Management – we provide front-line customer service with configurable workflows.

Contact us at (866) 493-6393 or bd@concordservicing.com to learn how we can support financing for your energy program. 

A pivotal year of transformation for Concord Servicing

Since the company’s inception more than 30 years ago, Concord Servicing has driven strong loan portfolio performance for customers through our investments in people, innovation, technology and world-class service. As we look back at key highlights from 2022, it is evident this past year was a pivotal one for our organization. We’ve embarked on a new journey toward unprecedented growth and innovation, and we are excited about the opportunities ahead.

Inverness Graham partnership

In February 2022, Inverness Graham, a private investment firm that invests in high-growth, innovative manufacturing, technology, and services companies, became a majority owner of Concord. This exciting partnership is providing Concord with new resources to expand our capabilities and solidify our market-leading position. It also offers an unprecedented opportunity to accelerate the company’s growth and expansion into new areas of business. 

“Technology is the engine that drives businesses today,” says Jason Alexander, Concord Servicing CEO. “We want to evolve our business beyond loan servicing to become a key player in the fintech space. To do this, we need to strategically innovate our technology to gain a competitive advantage in the marketplace. With Inverness Graham, we now have the tools to begin that evolution.”

Top-tier performance

We experienced record-breaking growth in 2022, securing multiple new client relationships in the home improvement and residential solar markets. In addition, we expanded our relationship with key existing accounts through services like Blackwell Recovery collections, lien management, and backup servicing. Notable performance highlights for 2022:

• 15% year-over-year revenue growth
• 20%+ increase in portfolio size
• 100% commitment to our clients’ success

Our strong performance in 2022 leaves us well-positioned for future success, as we work to achieve notable 2023 growth goals while expanding our business into exciting new markets. 

New leadership team

In November 2022, Concord introduced a new leadership team to help kick off a new era of growth and innovation at the company. The team’s combined expertise and vision will help advance Concord’s market position and transform the business for the future. Jason Alexander joined Concord as the new CEO, along with Chief Technology Officer/Chief Information Officer Kevin Clark, Chief Innovation Officer Adonis Bitar and Chief Creative Officer Steven Ray.

“As a technology company in the financial sector, we have a tremendous opportunity to add value for our customers by helping them anticipate what’s next for their business,” says Alexander. “This leadership team will be instrumental in helping us to look around the corner and execute on our vision to become a fintech leader.”   

We’ve worked hard to earn our reputation as a premier loan servicing provider in the solar, energy efficiency, home improvement and vacation ownership markets. In 2022, Concord made some key investments in human capital and technology that set the foundation for our company’s future. In the year ahead, we’ll continue to enhance our capabilities and increase value for our customers as we explore new ways to grow and transform our business. The future is looking bright in 2023!

If any part of your business relies on issuing loans, then you’re familiar with borrower delinquencies. These delinquencies happen for many reasons and are sometimes unavoidable. Too many delinquencies can spell big trouble for your portfolio performance. However, there are simple steps you can take to both stop delinquencies from happening and to make them less painful for your company when they do happen. 

In this guide, we offer three strategies that will help you improve your portfolio performance through proactive delinquency reduction. 

Why Borrowers Miss Payments

When a borrower misses payments, it’s typically for one of three reasons. 

1. They have the funds to repay the loan, but miss a payment due to:

• Forgetting the payment was due 
• Not knowing when to make the payment 
• Not knowing how much to pay

2. They’re unhappy with the product or service received, so they don’t make their loan payment. 

3. They don’t have the funds to repay the loan.

The above reasons fall into three broad categories – communication, fulfillment and financial hardship. Each category requires a different prescription, but the best loan servicing strategy accounts for each scenario with a holistic plan. 

Strategy #1: Communicate, Communicate, Communicate

When a borrower misses a payment because they forgot or didn’t know how much or when to pay, that’s a breakdown in the communication process. The best way to stop these missed payments from happening is with proactive communication. 

Loan servicing providers should initiate frequent communication with consumers in a variety of channels, including electronic forms such as chat, text and email. But before your servicer can communicate with your consumers, you need to ensure you have the proper permissions. At origination, you should capture all relevant personal information and gain permission to contact consumers through email, text and other channels. Your contract should also ensure that those permissions carry over to your third-party loan servicing provider. 

This captured contact information and permission help your loan servicer establish strong lines of communication. If your loan servicer can send a text or email every time a payment is due, that will greatly reduce the number of borrowers who forget or don’t know when to pay. 

A strong communication strategy should also extend to your online loan servicing platform. A mobile-responsive consumer portal makes it easy for consumers to check their balance, make a payment or ask a question. And don’t forget to offer bilingual communications if a high percentage of your borrowers speak a language other than English.

The takeaway: Strong communication eliminates missed payment excuses. Make sure you get the information and permissions needed to for you and your loan servicer to communicate with your consumers. 

Strategy #2: Make Strong Escalation Management Plans

Sometimes borrowers won’t repay a loan because they’re not happy with what they bought. For example, if a consumer takes out a loan to purchase a vacation ownership property, but can’t book the dates they want, they might decide not to pay. Or, if a homeowner secures a loan for solar panels and is unhappy with the installation, they may also stop paying. 

Whether you’re responsible for the actual product or not, as the loan originator it’s your portfolio that will suffer if a borrower misses a payment. 

Overcoming borrower dissatisfaction takes a loan servicer working with you, as an originator, to solve the problem, and that means you need a strong escalation management plan for all parties.  

Here’s how a simple escalation management plan typically works:

When an account becomes delinquent, the loan servicer will contact the borrower to determine why a payment has been missed. If the missed payment is due to dissatisfaction with the product, the servicer will note the account and gather as much detail as possible. The servicer should then put a pause on the account and escalate the issue to the originator for follow-up within a specified time frame. Once the issue has been resolved, the servicer can then restart payments. 

While this process sounds straightforward enough, consumer fulfillment issues are rarely simple. Third-party loan servicers often must act as a facilitator to start a dialogue between the borrower and lender, and that means they must have strong communication skills. 

You can make sure your third party has the right interpersonal skills by asking them to provide you with consumer call recordings or by auditing live calls.  You’ll also want to put clear expectations in place so that as they act as an extension of your team, they represent your brand appropriately. 

The takeaway: Sometimes borrowers stop payments to signal dissatisfaction with what they bought. Before starting the collections process, your loan servicer should work to understand the issues, escalate concerns to you and work with you to restart payments once the issue has become resolved.

Strategy #3: Be flexible and understanding

If your consumers stop making payments because they don’t have the money, the first thing you want your loan servicer to do is determine if this is a short-term issue or a long-term issue. 

Short-term financial issues might be an unexpected car repair bill or a medical bill. With these types of situations, you can allow your loan servicer to work with your consumers to get them current through a payment plan. This may mean they make an extra monthly payment, or you put a hold on late charges. 

You may determine that a consumer is missing payments due to a long-term financial issue, such as the loss of a job or a medical disability. In these situations, you might give your loan servicer the option to offer a loan deferment program. 

Nobody wants to find themselves in a situation where they can’t pay their bills. You and your loan servicer should offer these consumers respect, empathy and ultimately flexibility. When a consumer has a positive experience with your brand – especially in times of hardship – they’re more likely to prioritize making payments to you over other creditors with whom they may have a negative experience. 

The takeaway: No matter what type of program you devise to help those going through financial hardships, it’s important your loan servicer works with your consumers in a way that is understanding and compassionate.

The Final Word

Some level of delinquency is inevitable, but that doesn’t mean your hands are tied. The first line of defense is to create strong communication channels and policies to prevent missed payments before they happen. When a delinquency does occur, you need to determine the reason before going straight to collections. Whether a delinquency is due to product dissatisfaction or financial hardship, working with your consumers in a collaborative way can help you get payments restarted faster.

Companies that pivoted during the pandemic to make customer collections a caring communications process will profit now in the midst of inflation, and possibly stagflation—inflation with no Gross Domestic Product (GDP) growth—as the year progresses.

In the world of customer collections, Concord fine-tuned its proprietary Blackwell Recovery® late-stage collections systems as well as early-stage processes during the pandemic. Given conditions where borrowers were experiencing extreme financial distress, Concord made sure that efforts aligned with compliance, caring, and client portfolio management circumstances.

Concord President and CRO Shaun O’Neill addressed this very topic more than a year ago in an April 2021 Fintech Nexus News article. He noted, “A combination of economic woes triggered by the pandemic, and exacerbated by weather-related catastrophes, makes kinder, gentler, more understanding collection policies good for portfolio performance. They’re likely to generate more revenue than a hardline approach, plus there’s the benefit of building longevity and loyalty with customers who like, trust and respect their ‘bill collectors’ instead of abhorring them.”

In the article, O’Neill details how the basics of these “new” policies are actually rooted in decades-old enlightened thinking. He cites a customer collections policy advocated by Peter Renton, co-founder of Fintech Nexus (formerly called LendIt), two decades ago: “A recommendation that collections and customer service ‘should be two sides of the same coin’ is currently gaining momentum in the pandemic era. But this approach was advocated fully two decades ago by none other than LendIt’s own Peter Renton…In a previous life he owned a printing company that sold products to credit departments and he had long advocated the need for consummate customer service. His key recommendations tied to bill-collection policies appeared in a January 2001 article in the prestigious Editor & Publisher magazine…In part, his bylined article states: ‘In this dark morass actually lies a wonderful opportunity to turn debt collection into a customer-relationship-building program…this opens up the potential to generate some unexpected goodwill.’”

That’s the playbook that Concord utilizes with loan servicing clients on behalf of clients and clients’ customers now—in areas ranging from loan onboarding and initial servicing to collections. Further driving the importance of this policy is ever-stricter regulatory compliance mandated by the Consumer Financial Protection Bureau (CFPB) along with various state and local agencies.

In the realm of continuous improvement, Concord is further enhancing project management to ensure covering all bases with new clients (and their customers). Implementation, customer service, and project management converge to make sure customer service is as dialed-in as possible. New products are being developed to support such efforts as omni-channel communications platforms. Ranging from responsive live customer support to texting, new systems truly will enable customers to communicate via their preferred channels.

To sum up, caring customer collections and loan servicing are important because they’re the right thing to do, as well as being good for portfolio performance and compliant with regulatory requirements.

Layoffs by several major corporations in recent weeks imply rising consumer borrowing delinquencies may be forthcoming. If this continues, consumers may experience less discretionary income, possible unemployment fears, and may be concerned over rising prices.  If this convergence occurs, loan servicers should be especially watchful for early signs of borrower distress in meeting loan obligations. As problems arise, caring customer collections and loan servicing policies will give obligors a sense of collaboration that will make them much more likely to do everything they can to continue paying.

This will be especially important with unsecured obligations, as many people may prioritize paying their mortgages over anything else—and minimize making what they feel are discretionary purchases.

In the home improvement and solar sectors, interest rates and state energy programs may heavily influence what are perceived to be discretionary purchases. People are less likely to put new solar on their roofs if interest rates are too high or there are no state energy-program driven incentives. That said, right now we’re seeing more solar installs among people who are passionate about it (and therefore view it as high priority)—or are utilizing the state programs with attractive terms. However, with rising energy costs this may be an area that benefits.

Home improvement in general may decrease if there is an increase in interest rates and unemployment. People will put in new furnaces, fix roof leaks, and handle other necessity-based projects. But, the decision to remodel a kitchen or bathroom may be postponed for those hit by the economic headwinds.

Portfolio performance bears close monitoring
As a result of all this, the quality of portfolio loan assets may change, depending on the asset class and portfolio composition. Low-quality portfolios may experience higher delinquencies and defaults if there is economic turbulence.

The upside is that there are always opportunities. In the loan servicing and collection world, many of those opportunities tie to working with and encouraging obligors to pay what they can when they can, instead of abandoning obligations altogether.  The customer support and care of collectors is crucial in times of obligor distress.

This is where Blackwell Recovery® and other collections processes can be invaluable. Using the pandemic as a previous example, portfolio performance did much better with collaborative approaches where borrowers not only did their utmost to pay, but respected and admired the company because of the opportunity.

In addition to direct portfolio improvement, collaboration helped ensure staying compliant in the watchful eyes of regulatory agencies. Lack of consumer complaints, and even positive social media reports, have proven to be business generators in their own right—all of which helps enhance portfolio performance.

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What’s going on with consumer delinquency? Depends on who you ask, and where you look…
READ MORE

Depends on who you ask, and where you look.

Marketwatch.com addresses this issue in a mid-June 2022 article. Excerpts follow:

Are credit card delinquencies high? Deutsche Bank explains why it matters how they are tracked…Concerns that the U.S. economy could be heading for a recession mount as inflation remains high and the central bank moves to tighten monetary policy. Those pressures have put renewed focus on the financial health of consumers, as soaring prices for gas, groceries and other expenses eat away at savings and paychecks…Credit cards often serve as a first place to look for signs of consumer distress. Still, it’s possible to get a vastly different picture of the delinquency rate…depending on how late payments have been reported, according to a new Deutsche Bank report.

At the high end, the New York Fed Consumer Credit Panel and Equifax data (NY Fed/Equifax) showed a 8.4% credit card delinquency rate in the first quarter of 2022, by including the portion of payments late 90 days or more…The Federal Reserve reported a 1.7% delinquency rate, by focusing on credit cards past due 30 days or more for the same stretch, while credit rating agency Fitch focused on delinquencies of 60 days or more, reporting a small 0.6% rate.

Questions remain over how past due debt is reported. ‘A 90+ day rate should be lower than the 30+ day rate…so what gives?’ Deutsche analysts wrote, in a Friday client note…Digging deeper, they noted that the NY Fed/Equifax consumer credit panel delinquency data included defaulted loans still in collections, while the Fed data from the Call reports and the Fitch ABS index didn’t.

Then, there are credit industry insights from Transunion.com showing first quarter data broken down by asset class type. Charts below include credit cards, auto loans, unsecured personal loans, and mortgage loans.

Q1 2022 credit card trend

^{*Note: Originations are viewed one quarter in arrears to account for reporting lag.}

Q1 2022 auto loan trends 

^{*Note: Originations are viewed one quarter in arrears to account for reporting lag.
**Data from S&P Global MobilityAutoCreditInsight, viewed one quarter in arrears.}

Q1 2022 unsecured personal loan trends 

^{*Note: Originations are viewed one quarter in arrears to account for reporting lag.}
 

Q1 2022 mortgage trends 

^{* Originations are viewed one quarter in arrears to account for reporting lag.}

Tom Myers, former Slipstream Business Development Director, has joined Concord Servicing as Vice President of Business Development. This move expands a six-year-long partnership with Concord encompassing funding, loan origination and loan servicing.

Previous partnership focus on regulated energy, solar, and home energy efficiency improvement sectors will now also include commercial solar, HVAC, and installation contractors to further aims in the for-profit arena across all income levels.

“Tom joining Concord will enable us to expand existing relationships we’ve built together, as well as help companies offering and installing HVAC, solar, and other energy efficiency-oriented products and services,” notes Concord President and CRO Shaun O’Neill.

As part of Slipstream, Myers found funding for low-to-moderate-income borrowers seeking home energy efficiency upgrades through state energy programs, leveraging public funds with private investment. Concord handles loan servicing—including loading new loans into the portfolio, accurately accruing interest and payments, and handling UCC filings where needed. In addition, Concord provides daily loan aggregation reports to stakeholders for current portfolio status and addresses collections issues from early-to-late stage delinquency.

Notes Myers, “Given the demand for energy efficiency-related lending at all income levels, our going-forward efforts will focus on finding programs and lenders with competitive interest rates and easy loan qualification, backed by Concord’s 12-year-long pioneering loan servicing expertise in the renewable energy arena starting with a pilot effort through The New York State Energy Research and Development Authority (NYSERDA) in 2010.”

Myers adds, “Our partnership model has paved the way to success in the state and utility energy program sector, and has proven an effective incentive for contractors to enlist consumers to install energy efficient systems and equipment with easy loan approval and low-interest loans.

Technology itself is helping drive rapid expansion of efforts both in regulated and market-driven programs.  Myers says, “There are devices, technology, and programs far different than even a decade ago. When high-load demand in a sector gets too hot or cold, the grid can turn down temperatures. There’s new heating and cooling technology and geothermal. A decade ago, solar storage was hardly affordable. As we shift the grid from coal to picking up power in such other sources as hydrogen fuel cells, nuclear, and water, we are truly decarbonizing our world!”

Congratulations to the California Energy Commission, Connecticut Green Bank, and New York State Energy Research and Development Authority (NYSERDA)for their 2022 State Leadership in Clean Energy Awards from the Clean Energy States Alliance (CESA). Since 2009, the biennial Leadership Awards have recognized outstanding state programs and projects that have accelerated the adoption of clean energy technologies.

“Concord is proud to be associated with these organizations, which have blazed new trails in use of clean energy and have contributed substantially to energy efficiency initiatives in their own states, as well as modeling subsequent efforts across the country,” notes Shaun O’Neill, Concord President and CRO.

Concord has worked with NYSERDA since 2010 to pioneer loan servicing programs for both Smart Energy loans and, later, On-Bill Recovery programs. The company handles a variety of loan servicing initiatives for Connecticut Green Bank and the California Alternative Energy & Advanced Transportation Financing Authority (CAETFA), a leader in green financing for the State Treasurer’s Office programs affiliated with the California Energy Commission.

Notes the CESA news release, awards were given to the “California Energy Commission (CEC) for the California Building Energy Efficiency Standards (2022 Energy Code) for newly constructed buildings and renovated buildings. The 2022 code blazes a trail for states seeking to decarbonize the building sector aggressively and cost-effectively….Connecticut Green Bank for Green Liberty Bonds. Modelled after the War Bonds of the 1940s, Green Liberty Bonds are purchased by individual investors in lower-dollar denominations (the bonds are offered in $1,000 increments), enabling people to directly participate in the green economy and earn a return on their investment…New York State Energy Research and Development Authority (NYSERDA) and New York State Homes and Community Renewal (HCR) for the Clean Energy Initiative (CEI). NYSERDA and HCR have partnered to provide incentives and technical assistance for decarbonization of multifamily affordable housing developments in New York State.”

“These awards exemplify a concerted commitment to transforming old, inefficient, and resource-depleting energy systems into renewable, sustainable, and economical energy efficiency models,” notes O’Neill. “It’s the wave of the present and future for the country’s energy grid, and is an increasingly economical way for consumers to save money on their utilities—especially in the low-to-moderate income arena.”

Notes Tom Myers, Director of Business Development for Slipstream, a Concord partner on low-to-moderate income state energy efficiency loan origination and servicing, “Ultimately, the ability to connect borrowers with energy savings rests squarely on the ability to find affordable, flexible loans and installers willing and able to participate. These award-winning organizations are doing just that, providing a solution that starts with energy-efficient sources and ends with consumers being able to save money while contributing to clean energy advancement.”

Capitalizing on the “need to be good or be gone,” Serenité Private Residence Club at Camelback Mountain in the Poconos is doubling down on customer service benchmarks on everything from facility design and member connection to such fundamentals as payment processing provided by Concord Servicing.

Notes Gregg Bittner, Serenité Chief Financial Officer, “Before Concord came on board, we did all payment processing and custodials in-house. As this is their expertise, they can focus on these vital areas and we can concentrate on our core competencies. So far, this is far exceeding our expectations—allowing us to pull back resources and better define and perform on what we are delivering.”

Concord President and CRO Shaun O’Neill points out, “Our partnership with Serenité shows how well the relationship can work when all parties are committed to working together in the best win-win way possible.”

About Serenité
Serenité Private Residence Club at Camelback Mountain in the Poconos is a private club where members stay and vacation. The club combines the luxury amenities and services of a boutique resort with the comforts and security of a “home-away-from-home” featuring stately-appointed, fully furnished residences. Serenité is embracing the true spirit of the mountains with a focus on physical wellness and mental wellbeing with the integration of world-class level hydrotherapy spas and outdoor wellness hiking trails, while bringing together a genuine family atmosphere. Club events and socials give members of all ages something to enjoy and look forward to all four seasons of the year. The member community is the core of Serenité. www.ownserenite.com

Cost-effective, efficient, and knowledgeable third-party loan servicing is a major force driving loan compliance, leading-edge security, robust administration and reporting, investor/rating agency confidence, and best-case portfolio performance

Green Banks at both the state and national levels will be instrumental in securing and leveraging large-scale funding of energy-efficient programs nationwide. With Green Banks will come many new jobs, opportunities for consumer-friendly financing and lower utility bills at all economic levels, and a rapid increase in renewable energy use.

It all started with establishment of the Connecticut Green Bank in July 2011. According to its website, the first Green Bank in the nation supports the Governor and Legislature’s energy strategy for cleaner, less expensive, and more reliable energy sources while creating jobs and supporting local economic development.

Key to success is development of new and innovative financing programs attracting more private capital to grow public/private programs around energy-related initiatives.

42 states now operating or developing Green Banks
Reversing a long-time axiom that “climate policy advocacy equated to making things more expensive, Green Banks make it cheaper. Now, it’s investment, investment, investment. The Green Bank philosophy fits into the general narrative.

Smart-E loans leading the way
Adding fuel to the energy efficiency fire are Smart-E loans. Connecticut offers these unsecured, low-interest personal loans with flexible terms to upgrade home energy performance. Almost any home improvement project that reduces energy use and lowers costs may qualify.

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