Time in Business
PFSC was formed in 1992 and has successfully and efficiently serviced billions in asset value for a diverse group of clients across the U.S.
Over the years, we have seen institutions enter and then exit the third party servicing business. With recent market turmoil, servicers have gone out of business, endured ownership changes, altered focus, or have exited certain markets. These companies continue the inevitable process of implementing new strategies, entering new markets, exiting others while ramping up, downsizing, and restructuring. The servicing arms of these businesses are frequently impacted because servicing was, at best, a non-core and adjunct component of the overall business strategy.
At PFSC, servicing is all we do and we are proud to say that we have remained dedicated to third party servicing and the markets we serve since 1992. Our attention and commitment have not changed. PFSC’s efforts and expertise remain focused solely on how we can add value through third party servicing.
SSAE 16 Type II (“SOC I”) Compliant
PFSC undergoes annual external audits conducted by a nationally recognized audit firm in order to produce our SSAE 16 Type II (“SOC I”) audit report. This robust audit encompasses many facets of PFSC’s systems, processes, and internal control structure. Our client’s audit firms utilize the SSAE 16 audit as part of their audit processes. In most instances, our client’s auditors place strong reliance on PFSC’s SSAE 16 audit, thereby narrowing the scope of their audit work.
Our clients are able to leverage PFSC’s business continuity capabilities for their benefit. Developing a robust disaster recovery/business continuity plan and strategy is time-consuming and expensive. In addition to employing a certified Business Continuity Professional, PFSC has an extensive business continuity plan that is reviewed and tested throughout each year. PFSC performs daily disk-to-disk replication between its primary data center and its colocation facility managed by Sungard Availability Services™. A core component of PFSC’s plan is built upon redundancy. PFSC has redundant power, redundant internet connectivity, multiple remote work locations identified, redundant data backups, a crisis communication plan, and business interruption insurance that collectively will support recovery in the event of business interruption.
Partner, not Competitor
There are several lenders and lessors today that want to leverage their servicing infrastructure by promoting portfolio outsourcing capabilities. In doing business with such institutions, you must get comfortable with the fact that a potential competitor – another company that also provides financing programs – will be servicing your portfolio and will have access to your most confidential business information, including your lease or loan documents, customer lists, vendor programs, pricing information, portfolio performance criteria, profitability, etc. Even if such institutions do not directly compete with you today, nothing prevents such institutions from competing directly with you in the future.
You must further get comfortable with the fact that there is inherent conflict of interest relative to resource allocation and prioritization. Where do the best servicing personnel devote their time – to your portfolio or the servicer’s portfolio? Where do projects fall on the IT prioritization list – are yours at the top or are the servicer’s at the top? In an era of increasing delinquency and default, where do the extra and best collection resources get allocated – to your portfolio or the servicer’s portfolio?
PFSC’s business strategy and corporate policy dictate that we do not hold or own portfolios for our own account. We do not lend money, accept deposits, or purchase accounts or portfolios. 100% of our time and resources are devoted to servicing client portfolios. As a result, there is no conflict of interest and our clients are confident that PFSC is fully aligned with their business objectives.
While portfolio servicing is a critical element in any funding model, most of our clients did not begin their business because they were experts in servicing. The catalyst for their business formation was based on the ability to source and originate transactions; to meet the sale or financing needs of a parent or affiliate company; to exploit an under-served niche in the finance markets; or to provide a unique or innovative form of financing. By leveraging PFSC’s capabilities, our clients remain focused on what they do best. In contrast, the catalyst for PFSC’s formation was our servicing expertise. Clients appreciate leveraging PFSC’s people, processes, and technology, so they do not have to devote substantial time and resources to the back-end of their business.
Variable Cost Model
Building a servicing platform from the ground up is costly, time-consuming and risky. The up-front investment in servicing systems, people, office space, computers, phone systems and other items quickly becomes a fixed cost. Developing best-practice policies and procedures and hiring the right talent takes time and money. Many of these costs are locked in for extended periods of time, regardless of how quickly or slowly portfolio ramp-up occurs. Conversely, when originations cease and the portfolio enters a run-off mode, companies have a difficult time scaling down their costs to align with declining revenue. PFSC affords a variable cost model. You only pay for the assets being serviced.
Unlike many business process outsourcing companies, PFSC has extremely low employee turnover. We take care of our employees, provide a very competitive benefits package, and create a work environment that fosters teamwork and support. In our effort to provide superior service to all clients, we hire experienced and talented people. We average in excess of 17 years of industry experience across our various departments. Our management team averages in excess of 25 years of industry experience, and our managers have been employed at PFSC in excess of 14 years, on average. Our clients appreciate building relationships with long-term employees and avoiding the frustration of constantly educating new employees about their business and portfolio servicing expectations.
If your funding strategy includes securitizing your portfolio, accessing public markets, or obtaining an investment-grade credit rating for your portfolio, PFSC is an ideal partner. Throughout our history, PFSC has acted as servicer, master servicer, backup servicer, sub-servicer and document custodian on numerous securitizations and other rated transactions. Presently, PFSC acts as the servicer or backup servicer on dozens of securitizations and rated portfolios ranging from an $850M Equipment ABS TALF transaction to a $40M structured settlement securitization.
Since 2005, PFSC has been appointed the servicer, sub-servicer or backup servicer for over fifty (50) rated and securitized credit facilities with an initial issuance value exceeding $12 billion.
While some third party servicers have a “one size fits all” approach and a desire to apply common practices across all portfolios, at PFSC, we take a consultative approach with each client regarding our role, the scope of services we provide and how PFSC will deliver those services. Applying common practices across diverse portfolios may prove efficient for the third party servicer, however, it may not be in the best interest of each client.
At each phase of the servicing continuum, our clients are able to define how PFSC services their portfolio. Servicing procedures, invoice templates, pay-off methods, charge-off policies, repossession and remarketing policies, insurance practices, collection protocol and other facets of portfolio servicing are tailored to the needs of each client.