PrintCHINO - Snatching cars from loafers who neglected their financial obligations used to be an adrenaline rush for repo man Mike Wilcox.
But as the Inland Empire grapples with the major economic downturn and a 14.5 percent unemployment rate, the faces of debtors are resembling those of his neighbors and family members.
"The business has changed," said Wilcox, an operations manager of San Bernardino-based Auto Recovery Services Inc. "It's not just the deadbeats anymore. It's your average family. You have to keep that in mind, show them a little bit more respect."
Wilcox's business has tripled since the recession started. The repo man was picking up mostly big truck and SUVs - the gas guzzlers - at that time.
"When the housing market dropped the banks panicked," he said.
Financial institutions usually wait until the account is up to 90 days past due before they repossess the vehicle, he said.
But "fearing they will lose out," some banks have pulled the plug on accounts just 30 days past due.
Nationwide, the number of vehicle repossessions hit a record of 1.8 million in 2008, up 19 percent from 2007, according to Tom Webb, chief economist for Atlanta-based Manheim, the largest car auction company in the nation.
In the first half of 2009, repossession volumes were increasing at a near double-digit rate, and have continued to inch upward in the second half of the year.
"If the economy starts dropping, the repos go up," said Tim VanDam, a general manager of Manheim's Fontana auction site. "We've seen a 20 to 25 percent increase over the last 18 months."
Before the recession, there were, on average, 160,000 vehicles repossessed in Southern California every year. That average has jumped to almost 200,000 since the economy tanked, VanDam said.
Wilcox remembers a repossession order to pick up two cars from one family.
"They've been both looking for work and the husband just found something, but it was too late," he said.
The family managed to get one of their vehicles back, but three months later, Wilcox was there to pick it up again.
"It saddens me," he said. "I know they were struggling. But we don't make decisions, we just act as bank's agent."
Finding cars is becoming more difficult, too. Half the people whose cars Wilcox's company repossesses are also being foreclosed on, he said.
The repo man drives about 100,000 miles annually looking for repossessed vehicles. Only 20 percent of the automobiles are there on the first drive-by, he said.
Wilcox has worked in the Las Vegas area and once considered it more transient than the Inland Empire.
"People there make it rich and move," he said. "Out of 30 or 40 assignments, we may hit 20 vacant houses. People here used to be more established. Now we have to figure out where they went."
On a few occasions, Wilcox has had to repossess the vehicle someone was living in.
"I tell them they have to give up the vehicle," he said. "It is what it is. You got to go."
When a vehicle is repossessed, the lender can sell the car at an auction and apply the amount it receives to the loan. The borrower will still have to repay any remaining balance.
In some instances, after the repossession, the bank will let the borrower reclaim their car - providing they can come up with missed payments. Each day, 30 to 50 vehicles are redeemed from Manheim's Fontana auction location, VanDam said.
Some borrowers are choosing to voluntarily surrender their cars to the banks, avoiding repossession and tow fees, which can add up to more than $500.
"They are really good people, but they get to the point that they just can't pay anymore," VanDam said.
Lately, the repo tide seems to be receding.
Webb said he suspects repossessions will trail off soon, and attributes the change to the declining number of loan originations and tighter lending standards beginning to take hold.
Also, many lenders have increased their "proactive steps," such as implementing more payment deferrals, he said.
"After taking the TARP money, the banks want to look good so they are bending over backwards to keep many people in their cars," VanDam said, referring to the funds made available to banks by the federal government at the bottom of the economic freefall. "(The banks) are not as panicked as they used to be six to eight months ago."
Strict rules for repossession
According to the state Bureau of Security and Investigative Services:
Only people holding a valid repossession agency license or registration issued by the state may repossess a vehicle.
A vehicle can be repossessed after one payment is missed.
A vehicle can be taken at any time from any location, as long as the repossession agent does not enter a private building or secured area, including any locked or fenced area. The repossession agent cannot break into a garage to get the vehicle, but if the vehicle is parked in a carport or in the driveway, an agent can enter the property to take it.
Hiding a vehicle to avoid repossession may jeopardize a borrower's chances to continue the same contract with the lender. Also, an intent to defraud a creditor may be charged as a felony.
A repossession agent may not use force in attempting to repossess a vehicle.
A repossession agency is required to make a list of all personal belongings found in a vehicle and notify the borrower within 48 hours about how to recover the items and pay for the storage fees owed, if any.
The legal owner, such as a financial institution, must give the borrower 15 days written notice before the owner can sell the repossessed vehicle. This notice must be provided within 60 days of the repossession.
A repossession agent must notify the police of repossession within an hour of taking possession of the vehicle.
Peace officers may neither assist nor hinder repossessions.
