Company: CPSS
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001683168-25-001548
Chunk: 11

Company: CONSUMER PORTFOLIO SERVICES, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 1
Chunk 11
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 Current Job 
     5 years  
     5 years 
  
    Average Household Annual Income 
    $74,655  
    $72,930 

Dealer Compliance.  The
dealer agreement and related assignment contain representations and warranties by the dealer that an application for state registration
of each financed vehicle, naming us as secured party with respect to the vehicle, was effected by the time of sale of the related automobile
contract to us, and that all necessary steps have been taken to obtain a perfected first priority security interest in each financed vehicle
in favor of us under the laws of the state in which the financed vehicle is registered. To the extent that we do not receive such state
registration within three months of purchasing the automobile contract, our dealer compliance group will work with the dealer to rectify
the situation. If these efforts are unsuccessful, we generally will require the dealer to repurchase the automobile contract.

Servicing and Collections

We currently service all automobile
contracts that we own as well as those automobile contracts we service for third parties. We organize our servicing activities based on
the tasks performed by our personnel. Our servicing activities consist of mailing monthly billing statements; contacting obligors whose
payments are late; accounting for and posting of all payments received; responding to customer inquiries; taking all necessary action
to maintain the security interest granted in the financed vehicle or other collateral; skip tracing; repossessing and liquidating the
collateral when necessary; collecting deficiency balances; and generally monitoring each automobile contract and the related collateral.
For contracts that we securitize, we are typically entitled to receive a base monthly servicing fee equal to 2.5% per annum computed as
a percentage of the declining outstanding principal balance of the non-charged-off automobile contracts. The servicing fee is included
in interest income for contracts that are pledged to a warehouse credit facility or a securitization transaction. For contracts we service
for third parties, we receive a base monthly servicing fee equal to 2.5%, and certain other incentive fees tied to credit performance.

Collection Procedures.  We
believe that our ability to monitor performance and collect payments owed from sub-prime customers is primarily a function of our collection
approach and support systems. We believe that if payment problems are identified early and our collection staff works closely with customers
to address these problems, it is possible to correct many problems before they deteriorate further. To this end, we utilize pro-active
collection procedures, which include making early