WE’RE HEARING...technology may be key to helping property inspection and maintenance professionals manage foreclosed homes while keeping up with changing regulations and investor requirements.
George Mehok, CIO at Safeguard Properties, the nation’s largest property preservation and inspection firm, told me that in the wake of the foreclosure crisis, people in the mortgage field services world are under increasing pressure from regulators and investors to make sure properties that are foreclosed or become vacant are maintained and preserved up to code. Today, servicers and investors can face heavy fines and penalties from local governments if a foreclosed property becomes blight. And with localities changing the rules for REO management on a routine basis, the costs of managing REO keep rising.
Blighted properties pose reputation or “headline risk” as well as financial risk to servicers.
“That’s probably the thing that’s talked about the most from my perspective.”
The inspections are not a rare concern for servicers. Despite an improving housing market, the number of distressed properties remains elevated, Mehok said. Safeguard inspects some two million homes where the mortgage is 45 or more days past due annually on behalf of its clients. Some 15% to 20% of those properties eventually become vacant.
One side effect of the increased regulatory scrutiny of mortgage servicers and their vendor partners is that companies like Safeguard are getting to know their clients better. That’s because in most cases, new CFPB regulations require servicers to make site visits to their major vendors.
“We have a client in visiting Safeguard virtually every other week performing vendor audits,” Mehok said. “The level of scrutiny has increased significantly.”
But he says the site visits have proved positive for Safeguard. If the clients find any issues or problems on their site visit, Safeguard can take steps to address those findings.
“We become better, because when our clients come to visit Safeguard, and they are reviewing our business processes and information security controls, they are helping us improve.”
A lot of the company’s technology is designed to ensure that its contractors out in the field meet timeline requirements and remain compliant with regulatory guidelines. That reduces litigation risk and also helps the servicer sell the REO at favorable terms.
Safeguard sees mobile technology as a key tool to enhance its services for clients, he said. For a company that oversees thousands of inspectors and contractors across the county, mobility solves a lot of problems, Mehok said.
Giving inspectors the ability to send photos and file reports from the field eliminates the kind of errors that can occur if the inspector takes manual notes, examines perhaps dozens of properties over the course of a day, and then returns to his or her office to fill out reports on a laptop or desktop before sending them to Safeguard. The time lag between when the inspector was actually at the property and when they actually do the report creates a lot of room for error.
Safeguard’s INSPI mobile app allows inspectors to file reports from the field on devices using either the Android or the Apple operating systems. And because Safeguard receives the report right away, they can sometimes order follow up work or questions while the inspector is still near the subject property. Inspectors using the app have seen a marked increase in their ability to meet Safeguard’s timelines.
“Our mission is to ensure that the information that we provide back to our clients on the status of their properties and the maintenance is as timely and accurate as possible,” Mehok said.
Geo-positioning technology also is helping to improve field services work. GPS can help inspectors or contractors decide what’s the most efficient order in which to visit sites and what’s the best travel route. Satellite imagery also has the potential to help Safeguard improve its oversight capabilities.
Combining GPS technology with mobile applications can be used to ensure that inspectors or contractors are at the right property at the time they are supposed to be there. Safeguard also anticipates adding visualization mapping technology to its toolbox, Mehok said.
People in the property inspection and mortgage field services business will have plenty of opportunities to hobnob with colleagues in the coming months. The National Association of Mortgage Field Services hosts its 25th Anniversary 2013 NAMFS Conference & Expo in Chicago, Sept. 5-7. In November, Safeguard will be hosting its own national property preservation conference in Chicago as well. Mehok believes that mobility and data analytics will be among the hot technology topics when industry colleagues convene this fall.
Ted Cornwell has covered the mortgage markets since 1990. He is a former editor of both Mortgage Servicing News and Mortgage Technology.