Sometimes ex-homeowners will steal appliances and any copper piping before they leave their former home. They may even damage the property out of spite. Altisource can generate value by convincing homeowners to leave on good terms. If the homeowner does not agree to leave, then Altisource would have to go through the legal process of foreclosure. They will incur legal fees in preparing the paperwork properly (e.g. no robo-signing). Then a sheriff will visit the property to remove the ex-homeowner. Then Altisource has to change the locks and hope that the tenant does not return to continue living in the property (or to damage it). Altisource would like to prevent such scenarios. The company will try to pay the ex-homeowner money so that he/she will leave the property in good condition and so that the legal fees and other costs associated with the foreclosure process can be minimized.
The presentation provides examples of how Altisource has experimented with its “dialogue engines” to improve outcomes.
The presentation may be glossing over some of the realities of their business. Altisource uses foreign call center workers (mainly Indian) who probably do not have American accents. Americans often do not like talking to foreign call center workers. I believe it will make rapport more difficult to establish. Computer manufacturers such as Dell have tried offshore call centers in the past and did not have a positive experience with them. Altisource doesn’t really talk about such challenges in its presentation. On the other hand, I don’t think that Altisource wants to give away all of its secrets to its competitors.
In any case, I think that the presentation is very interesting and worth checking out. It provides some insight into the ‘nuts and bolts’ of how the business operates and how Altisource generates value for its clients.
*Disclosure: Long ASPS.