Delinquency

Your approvals shouldn't become your delinquencies.

Bad debt does not originate in collections. It originates at approval, three to six months earlier, which is exactly why nobody traces it back.

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Applicants approved without verified income default 4x more often.

The mechanism

Four things, and the timing is what conceals it.

A weak approval and its consequence are separated by a quarter or two.

Unverified means 4x

Applicants approved without verified income default four times more often. That multiple does not move until the screening changes.

The lag hides the cause

Bad debt from a weak approval surfaces three to six months later, by which point nobody connects it to the application.

Overrides get logged

If a leasing agent admits an applicant the system flagged, that decision is recorded. You cannot manage an exception rate you cannot see.

Every dollar hits NOI

Bad debt is not a collections problem downstream. It is a dollar off net operating income, and it originated at approval.

Physical vs economic occupancy

One of these numbers can lie to you.

A delinquent tenant counts as occupied on the weekly report and contributes nothing to the P&L.

  • Physical occupancy counts units with a signed lease

  • Economic occupancy counts units where rent is collected

  • A delinquent tenant is fully occupied and fully unpaid

  • Physical can read 94% while NOI declines

  • Economic is the figure lenders and owners underwrite against

Measured at ResProp

Decrease in delinquency
50%
Decrease in total evictions
24%
Fraudulent documents flagged
9,600
Override default multiple
4x

Credit and criminal screening were already standard there. Income was the gap.

FAQ

Delinquency questions

Why does physical occupancy look fine while NOI slides?
Because physical occupancy counts units with a signed lease and economic occupancy counts units where rent is actually being collected. A delinquent tenant is 100% physically occupied and contributing nothing. A portfolio at 94% physical with rising delinquency is running materially lower economic occupancy, and economic is the number lenders and owners care about.
How much of our bad debt is really from screening?
Measure it rather than estimate it. Split current delinquency by what the screening recommended at application. If your flagged-and-admitted population goes delinquent at several times the rate of your approved population, you have your answer and your number.
Are overrides always wrong?
No, and treating them that way is how you end up rejecting good applicants. Some overrides are legitimate cash-income applicants the automated path could not verify. The useful work is separating those from the ones that are genuine fraud flags, which is why override reporting by category matters more than an override count.
What actually moved at ResProp?
Delinquency down 50% and total evictions down 24%, with 9,600 forged documents flagged along the way. Credit and criminal screening were already standard there. Income verification was the gap.
Does this replace credit screening?
Not today. Native credit and criminal checks are planned rather than shipped, and we would rather say so. Today ProofUp verifies income, identity, and document authenticity, and runs alongside whatever credit screening you already use.

Split your delinquency by screening decision.

Flagged-and-admitted against approved. If the first is several times the second, that is the number worth acting on.

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