Technology for Managing Vacant REO Properties
The REO problem sweeping America is now a full-scale epidemic and cities across the country are looking for ways to hold foreclosing lenders' corporate feet to the fire to take care of the vacant properties they now own.
There aren't enough property managers out there to remedy the problem of overseeing all the empty houses, with potentially over two million REOs waiting to happen, and cities, quick to realize the dangers, are developing huge penalties for properties left unattended. How huge? The Wall Street Journal reported on the trend not long ago and found that municipalities from Rhode Island to California are looking to fine lenders up to $1,000 per day for properties that are insufficiently maintained.
It's a case of adding insult to injury, because lenders, servicers and investors are already suffering financially on REOs, especially in urban neighborhoods. Vagrants look for dark properties and take up residence as squatters. Drug dealers use them as transaction sites and labs. Thieves strip them of valuable metals, right down to ripping open the walls in order to get to the copper plumbing. Destruction is rampant and even a broken window can lead to all kinds of problems, from structural damage resulting from leaks to liability suits from invaders who become injured. If power is turned off, squatters often start fires, even if a fireplace is not available, and if a gas leak is present, disaster can be the result.
Apart from physical damage to individual properties, vacant and deteriorating properties have devastating effects on neighborhoods. Well-maintained properties take enormous value hits, sometimes leading to more foreclosures, families suffer and entire neighborhoods can be lost for years in the downward spiral of neglect. Home inspection services are growing in popularity, as are private security services, but as soon as the cat leaves, the mice come out once more to play their destructive games, and little is accomplished.
Like more and more solutions to thorny problems these days, technology is stepping up to fill the void left by the absence of human beings. Human intervention in almost anything is simply too expensive to maintain over a long period of time, including watching over a vacant property. A simple device, wireless and autonomous, is quickly becoming an attractive alternative for property managers trying desperately to monitor the swelling number of properties under their care. It is the RMD, for "remote monitoring device," and it is precisely what the doctor ordered to address the growing threat of foreclosed and abandoned homes.
The RMD is a small battery-powered piece of technology that is unobtrusively installed in one or more rooms inside the property. It has the ability to sense gas leaks, drastic changes in temperature or humidity, such as those caused by a fire, a broken window or a plumbing leak. The RMD also "talks" wirelessly to window and door opening sensors, water/flood sensors, smoke alarms, if present in the property, and perhaps best of all has an embedded motion sensing camera to snap photos of all who visit, authorized or not. If a sensor detects something amiss, or if the motion-triggered camera is activated, an alert is sent automatically to the property manager or their designee that attention is required. Each RMD is programmed to "check-in" each 24 hours.