NOV 27, 2012
REO Reality

Hurricane Sandy Disaster Response

NOV 27, 2012 12:44pm ET
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Millions of people and dozens of communities along the East Coast have been devastated by the effects of Hurricane Sandy. Our hearts are with the victims, and our support is with the first responders and volunteers who have worked to provide aid, restore power, return people to their homes, and ease suffering in so many ways.   

Having seen first-hand both the recent devastation of Hurricane Sandy and Hurricane Katrina in New Orleans in 2005, I was struck by the similarities of the two storms. As a result, the mortgage industry and its field servicing partners can utilize the lessons learned from Katrina to protect and restore collateral assets damaged by Sandy. 

Safeguard has developed a comprehensive disaster response effort that serves not only our clients, but provides useful information to the entire industry, as well as municipal code enforcement and other governmental bodies in affected areas. As each new disaster has impacted communities–Katrina, Irene, Isaac, Sandy and others, our processes and practices have been continuously tested and refined. 
 
Our disaster response services include:
 
1. On a daily, and more frequent basis when required, we distribute industry alerts with updates on FEMA declarations, investor/insurer guidance from HUD, Fannie Mae, Freddie Mac and others, as well as relevant news stories. These alerts are posted on the Disaster Update Center on Safeguard's Website, and include zip code listings of areas declared eligible for assistance. In many cases, the industry relies on Safeguard's alerts for the most current disaster-related information. 

2. When FEMA declares a disaster area, we deploy our inspector network in those areas to provide weather assessments which we send immediately to our clients. Our Field Quality Control team also reaches out to Safeguard's entire vendor network in affected areas to obtain as much detail as possible about affected areas. This information is vital for our clients to review which loans in their portfolios may be in storm-damaged areas.
 
3. While some of our clients review their portfolios internally, many others ask Safeguard to assess their presale property lists and inspect and report back on the condition of those properties. These begin as soon as our inspectors are allowed into affected areas. Because road closures, weather and other factors can limit the numbers of inspections that any one inspector can perform in a day, Safeguard brings inspectors in from other areas to assist with the effort so that assessments can be completed as quickly as possible.
 
4. We offer a FEMA Inspection in FEMA-declared disaster areas which provides more expanded condition information about the property as well as the surrounding neighborhood so that clients can make more informed decisions about their properties.
 
5. On the REO side, Safeguard reaches out to its vendor network, and its broker-direct team reaches out to real estate brokers to evaluate and report back on the condition of REO properties as soon as possible.  Where possible we utilize empowerment funds to make needed repairs, or obtain bids for repairs above the threshold. 

6. On current and defaulted loans, at the request of our clients, we conduct contact inspections with borrowers to confirm the property’s occupancy status and condition, provide the borrower with contact information for the mortgage company, and attempt to learn whether an insurance claim was filed to repair any property damages.    

7. At the request of clients, Safeguard conducts daily calls with their respective management teams to provide updates on properties and efforts underway in affected areas so that issues can be addressed quickly and efficiently.

8. Among the issues we have been working to address on a daily basis are: inaccessibility of neighborhoods to inspectors and contractors; shortages of supplies, including gasoline, plywood, tarps, roofing and other building materials; extensions on investor compliance timeframes for initial securing and inspection requirements; and hazard claims issues, including claims reviews, payments, non-covered perils, properties with no flood insurance, distinctions between wind and flood damage.

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