Landscape Is Changing for Field Service Industry
The head of the nation's largest field services provider says that the field services niche is gaining respect and understanding from other participants in the mortgage servicing industry.
"The entire field services landscape has changed - over the last five years in particular," said Robert Klein, head of Safeguard Properties. "When I started this business, field services was thought of as the lowest point on the totem pole of the default management industry. Nobody would talk to us."
Nobody includes the Department of Housing and Urban Development, whose officials often told him that their client was the servicer, not a vendor such as a field services provider. But today, he said, HUD and other stakeholders in the mortgage finance system understand how important field service work is to minimizing losses in the event of default. A senior HUD executive and municipal officials recently participated in a panel discussion on field services that Mr. Klein hosted as part of the Western States Loan Servicing Conference here.
And that increased communication with HUD and other regulators and investors has been a good thing for all concerned, Mr. Klein told MSN.
HUD's guidelines for field services work, which are often used as a template for other investors, are very complicated, Mr. Klein said. Interpretation of the guidelines is a key factor in guiding how field service providers know when and how to perform property preservation and maintenance work, and HUD now views companies such as Safeguard as business partners.
"We have made it our business to become experts," Mr. Klein said. "We are out there to protect their interests as well as our clients."
As a result, Safeguard now presents a number of educational seminars at industry trade shows, as well as sending out bulletins to keep servicers abreast of changes in guidelines that affect field services work.
The aim is not only to make sure that collateral is preserved so that REO can be sold at a fair market price, but also to ensure servicers that they are in compliance with all applicable standards and rules. Failure to adhere to those guidelines can get a servicer into trouble with HUD or with other investors. As a result, Safeguard puts a big emphasis on training its field service contractors and has a rigorous quality control program.
"If our contractor does something wrong, eventually our clients will know about it," Mr. Klein said. "There is a tremendous liability that goes along with what we do."
Increasingly, servicers and investors realize that property preservation is a major aspect of the mortgage servicing business that can have an impact on the bottom line when loans default. Over time, the property preservation guidelines issued by other investors, including Fannie Mae, Freddie Mac, Ginnie Mae and others, have become more detailed and exacting, Mr. Klein said.
Safeguard Properties is the largest privately held mortgage field services company in the nation. Founded in 1990 by Mr. Klein, the company now has more than 350 employees, including about 80 who work onsite with client servicers. Safeguard is supported by a nationwide network of subcontractors able to perform requested functions as well as ancillary services. The company operates in the United States, the Virgin Islands and Puerto Rico.
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