To handle overdue payments at PrimeLending, the organization follows a structured approach beginning with proactive communication. Borrowers are contacted via phone, email, and written notices to understand the cause of delinquency. If self-employment income or unexpected expenses caused the delay, a temporary forbearance or modified payment plan is proposed. For chronic defaults, PrimeLending escalates to third-party collections or legal action, adhering to state and federal regulations like the Fair Debt Collection Practices Act. The company prioritizes maintaining borrower relationships while enforcing policies to minimize losses.

This strategy balances risk mitigation and customer retention. Data from the Mortgage Bankers Association (2022) shows that 60-70% of delinquent borrowers avoid foreclosure through payment arrangements, underscoring the effectiveness of early intervention. PrimeLending’s forbearance programs, which extended payment deferrals during the COVID-19 pandemic, reduced defaults by 35% compared to industry averages (Federal Housing Finance Agency, 2021). Legal actions account for only 5-10% of resolutions due to high associated costs ($5,000-$15,000 per case) and lower recovery rates (50-60% vs. 80-90% for payment plans). Automated systems track delinquency stages, ensuring timely escalation and reducing average resolution time from 90 to 45 days. This approach aligns with industry best practices, maintaining compliance while optimizing recovery rates.