With the housing crisis lingering, real estate owned properties have faced unique challenges over the past several years. Mortgage servicers and investors have had to change the way they deal with their REO portfolios and pay more attention to the marketability of these properties that now compete side-by-side with traditionally marketed homes for sale.
To show its clients, or the mortgage servicers and investors, that the work its contractors perform is completed to the highest standards, Safeguard Properties created a new quality assurance program for its REO service line.
Key components of Safeguard’s quality assurance program include reviews of the interior and exterior work its contractors complete, collecting outside data, analyzing the results, and adjusting practices based on those results.
Interior and Exterior Reviews
Safeguard’s quality assurance program starts once its national network of contractors completes initial services. A team of inspectors is deployed to visit properties and assess the work completed. This process includes a 178-question script the inspectors must follow for both the interior and exterior of the properties. Photo documentation is required to illustrate what the inspectors find during this extensive review.
Collecting Outside Data
In addition to the information gathered by its inspectors, Safeguard uses data collected by outside sources, such as information from clients and brokers. This data, along with what has been gathered by Safeguard’s field quality-control department, in addition to data from clients’ third-party contracted group of inspectors, are compared with similar information gathered by Safeguard’s inspectors during the quality-assurance process.
Analyzing Results
Once all of the data are collected, Safeguard conducts a statistical analysis. The results are used to create “heat maps,” identifying with designated colors the areas or regions in which the contractors are meeting the requirements and standards. It also is used to determine the regions where the contractors are deficient. By identifying the weakest areas, Safeguard can take corrective action.
Adjusting Practices
When Safeguard’s quality-assurance team identifies contractors who are not compliant in specific categories, corrective measures are taken. The company may also choose to deploy its field team to visit “hot areas,” or those that are red on the heat map, and work with contractors individually based on their performance.
Any contractor who is deemed deficient in certain service areas also will receive additional training and specific goals for improvement. A four-week plan will be put into place that will incorporate multiple unoccupied property visits, contractor field training and office visits.
Quality Successes
Safeguard’s new quality assurance program has yielded good results. Since starting the program in November 2011, the company has experienced a 39% overall increase in properties with no deficiencies or quality issues.
Improvements in quality have also been reported by Safeguard’s clients. The company’s inspection scores from its clients have increased 17% since initiating this new quality-assurance program.