Lynn Effinger
Lynn Effinger Lynn Effinger is a veteran of more than three decades in the housing and mortgage servicing industries.

As a veteran of more than 22 years in the mortgage servicing industry, primarily in the default area with respect to REO asset management and field services on both the client and vendor sides of those disciplines, I know intimately that industry standards for these specific disciplines are greatly in need. Whether practical or not, the topic deserves attention — common sense dictates it.

The ultimate beneficiaries of setting and abiding by industry-standard best practices in these specific areas are, of course, the lenders, servicers and investors who hold portfolios of nonperforming residential real estate assets. They all would benefit in many ways, such as reduced holding time and increased asset recovery due to the streamlining of task workflow and quality control management. And, so necessary in today's regulatory purgatory, they would also benefit from a compliance standpoint. Hallelujah!

But, and that's a very big but, the people who are the actual "boots on the ground," such as listing agents and brokers, property inspectors, and those local contractors who do property maintenance, preservation, repairs, rehabilitation and refurbishment would also be beneficiaries who would no doubt do a "happy dance" if such standards were adopted industrywide. Why? I thought you'd never ask.

With respect to field services, such as property inspections, preservation, maintenance, rekeys, repairs, trash-outs, renovation, rehabilitation and so forth, by setting and adhering to industry standards for best practices the field services providers and, more importantly, their subcontractors (since nearly every national or regional provider utilizes subcontractors), these practitioners would know without doubt exactly what is expected of them no matter who gave them a work order. This would save time and money.

That is not the case in today's environment. Although one would "assume" that all field services providers handle work orders in the same manner, it only takes a few nuances to change requirements. For example, in some cases the task-tracking software programs utilized by various field services providers are unique enough to cause differences in reporting on work orders. This is sometimes made more complicated if that software program was built by an in-house IT team, but the bigger issue is "mobile" applications for photo documentation. Not every subcontractor has or wants to buy the mobile device required to accommodate these "real-time," geo-tracked, date- and time-stamped reporting requirements. Sad but true.

And that's certainly not all that causes issues. Some field services providers, for example, require before and after photos of rekeys, winterizations and other assignments, but some do not. Some have specific requirements, often dictated by their clients, for the types of materials used, appliances and fixtures approved, carpets and vinyl, interior and exterior paint, and so on. Some field services companies allow the subcontractors to use their own judgment regarding the tarping of leaking roofs, removing hazardous materials and fixing health and safety issues when found…but most don't allow them to do so, mostly based on client considerations.

These issues and many, many more would be all but eliminated through industrywide standards for best practices. If, and that's a big if, all lenders, servicers and investors could agree on such standards, which, unfortunately, is unlikely.

In terms of the listing agents and brokers, they must work under different guidelines and requirements for almost every client from which they receive REO assignments, and this is further complicated if the lender client works with a third-party asset management outsource company (some lenders use the services of multiple outsourcers, many of which handle the lender client differently in some ways than the other outsourcers for the same client).

Different requirements on how paperwork is submitted, how offer transactions are completed, invoicing, communications, operating on different tracking system portals, and so much more complicate a truly common-sense process that has been modified and changed more times than there are days in a year — and not necessarily for the better.

There are far more issues at play here and certainly not enough space available to mention them all. Suffice it to say that industrywide standards of best practices are a topic that deserves consideration by everyone involved. We should prove that common sense still can prevail.

Lynn Effinger is a veteran of more than three decades in the housing and mortgage servicing industries. He currently serves as senior vice president-institutional services of RIO Genesis Software Solutions.