ABN AMRO proactively contacts clients with a residual debt in order to make them aware of the potential problems and to work with them to find solutions. As part of this exercise, ABN AMRO has contacted around 50,000 clients by telephone and written to 100,000.
In addition, for the past three-and-a-half years, ABN AMRO has had a Mortgage Care Team, which sets out to help clients who are in danger of getting into financial difficulties. The Team offers a variety of customised solutions geared to the needs of the particular client. ABN AMRO recommends that clients contact the bank as soon as possible rather than waiting until their arrears have built up, possibly to such an extent that the situation has become irrecoverable. The sooner the bank is informed, the better able it is to offer help. In the last few years, around 18,000 clients have been helped in this way. The ABN AMRO Mortgage Care Team comprises around 30 people.
Partly thanks to this approach, ABN AMRO does not encounter any major payment arrears, although the number of clients with arrears is increasing due to the recession. Clients also value this approach. The main reasons for people getting into difficulty with their mortgage are divorce and, to a lesser extent, (compulsory) unemployment and poor financial management. The bank initially focuses on improving the client‘s financial position so that the arrears can be eliminated. With a portfolio of around 950,000 mortgages, ABN AMRO has only a very small proportion (1.6%) of clients who are in arrears for periods ranging from a few weeks to three months. 95% of these clients are out of their arrears within six months; 6,600 clients (0.7% of the total) currently have stubborn arrears of more than 90 days.
The number of clients whose long-term or irrecoverable payment arrears lead to private sale or auction of their mortgaged property is extremely small. In 2012, ABN AMRO sold 1,650 homes owing to serious payment arrears; 400 of these homes were sold by auction. The reasons for turning to the last resort of auction is generally the client’s unwillingness to cooperate, fraud or inability to trace the client.