A: Unifund buys large pools of unsecured defaulted consumer loans, typically credit card accounts, from the major banks and credit card issuers. Future Home Liens (FHLs) are liquidation-ready pools of defaulted consumer credit card accounts which have guaranteed home assets. FHL’s are legal process-ready and should be litigated in order to pursue payment plans, judgments and liens.

A: Unifund has had customers buying and liquidating FHL’s for several years so there is an existing track record of success. Unlike “contact collection accounts”, FHL accounts should immediately be placed into your legal process, receive a 30-day demand letter and, in nearly all cases, be litigated on the 31st day. An overwhelming number of FHL accounts either do not contest the litigation or voluntarily refinance or enter into payment plans. FHL’s are purchased on a pool basis for a “higher case volume methodology vs. pre-foreclosure” approach to liquidation. Unifund experience finds that customers who actively manage their FHL investments earn a 65% to 85% gross payout over a 4-5 year period. Generally, liquidation is greatest in the first and second years after filing suit and additional liquidation continues into the third, fourth and fifth years.

Short answer: Diversifying your business can insure against the challenges of market cycles, the challenges of traditional collections AND you will use your existing resources more efficiently and effectively in the process. The addition of an FHL investment strategy can compliment existing collections methods and FHL portfolios can be more efficiently worked since asset searching has already been completed prior to your purchase. Finally, it is not necessary to make a huge outlay to get started because FHL portfolios can be purchased in small, medium and large pools ranging from $5,000 to $5,000,000 and can be customized by region, state and county to create a portfolio matching your footprint, capabilities, and appetite.