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70 loan liquidation. In addition to corporate servicer advance rec- onciliation, maintaining timely default oversight actions, including foreclosure initiation, default reporting, and post-default inspections, reduces the potential for delayed claim submissions and mitigates missed claims opportunities. THE OFFENSE: THE IMPORTANCE OF ANTICIPATION Additional processes can be implemented to maximize claim-proceeds retrieval and decrease operational inefficiencies and pressures. One process strategy is to take an offensive stance on claims preparation by preparing claims prior to applicable the foreclosure or third-party sale. In general, these termination events represent claim-submission deadline-trigger dates, so the sooner claims can be built for submission, the better. Completing claim preparations before ex- pected claim-termination events both minimizes the likelihood of missing claim-filing deadlines and reduces downstream production pressure given wider preparation timelines. Another strategy is competitive foreclosure/ post-foreclosure sale efforts, which can reduce operational claims-monitoring costs, decrease claim-submission volumes, mitigate financial exposure and holding risks, and accelerate the retrieval of expected claim proceeds. FULL SPEED AHEAD In the post-foreclosure sale/post-termination event world, time is of the essence when it comes to asset liquidation and claim submission. Delays in property conveyances for FHA loans and re- imbursable expense-claim submissions heighten potential downstream operational and financial risks. Property-preservation expenses relative to FHA-insured assets, for example, cannot be claimed from HUD if the expenses are incurred more than 30 days after foreclosure sale dates (or dates of possession, extended milestones). Moreover, delayed property liquidations present supplemental risk factors, such as code-violation assessments, hazard-claim damages, and various title impediments—none of which are reimbursable. Aside from the potential inability to claim certain expense types due to unapproved upstream activity delays, debenture interest on FHA-insured assets may not be fully earned. While unearned debenture interest can't always be avoided due to uncontrollable delays that do not qualify for insurer approval, the severity of lost debenture interest can be mitigated. Effec- tive oversight of various preclaim events, includ- ing first legal, foreclosure due diligence, default reporting, evictions, conveyance, and claim submission, will decrease missed reimburse- ment opportunities and increase levels of earned debenture interest. BOLSTERING THE DEFENSE LINE e unknown can be very expensive. Investor and insurer reimbursement levels vary relative to extended lapses and uncontrollable events. Servicers can take several steps to maximize reimbursable-claim opportunities and decrease operational and financial risks for general FHA- insured assets: » Accurately identify property damages at the time of vacancy, separating those repairs that are covered through hazard policies from those that are reimbursable from the insurer. · Request and receive repair bids in a timely manner. · File hazard insurance claims for those damages not covered by the insurer. · Submit and monitor overallowable and extension requests as necessary. » Develop a transparent partnership with property-preservation firms. » Board properties that are not impacted by surchargeable damages or mortgagee neglect, nor subject to insurer indemnification for competitive-auction efforts. » Manage to dual conveyance and third- party sale outcomes: · Conduct financial analysis around corporate contributions. · Submit and monitor extension requests as necessary. » Conduct quality-assurance reviews prior to claim submissions. · Trend and report missed claim opportunities and third-party losses. KEEPING AN EYE ON THE BALL Successfully managing a pipeline of hundreds or thousands of accounts pending ultimate retrieval of claim proceeds requires continual routine inventory-reporting methods. To fully understand operational impacts and projected financial losses and gains, fluid claim-eligibil- ity volume and account aging should be fully transparent. e ability to report holistic and segmented views of various claim phases across all claim types allows servicers to understand short- and long-term staff scaling needs and anticipated financial impacts. Tight pipeline reporting also identifies production-efficiency opportunities around those pre-claim stages where delays may exist. e various processes within the claims environ- ment—including property maintenance and preservation, vendor management, eviction, corporate advance and invoice reconciliation, third-party sales coordination, claim preparation, quality assurance, loss analysis, and future loss projection activities—often run concurrently at some level. However, active-volume levels within each of the claims oversight and production teams tend to fluctuate. As a result, effective and continuous progress may require cross-functional training to ensure the ability to scale up or down across more than one functional process. KNOWING WHEN TO PASS THE BALL Servicers with internal structures that are not built for internal scale may be better suited to outsource certain task-driven, highly specialized, analytical, and/or quality-assurance components. Since the claims process represents the end of the line, the last line of defense, financially, it makes a lot of sense to facilitate independent performance and structural reviews across key functional activities. On a related note, from a regulatory perspective, claim errors, including claiming unallowable expenses, overclaiming allowable expenses, and providing inadequate support of claimable expenses, can result in potential sanctions and/or significant monetary fines as investors and insurers often extrapolate audit findings across full production populations through the production timeline audit scope. ACCURACY, EFFICIENCY AND TRANSPARENCY IN THE LAST LINE OF DEFENSE Finally, robust quality-assurance measures developed to manage performance levels/SLAs of third-party vendor partners and internal pro- cessing activities promote the ultimate retrieval of qualified reimbursable claim proceeds. Quality assurance and throughput measurements quickly isolate corrective action targets across key func- tional segments. e full scope of claims management, including various encompassing cross-functional areas, can be a challenging space for servicers to navigate given the breadth and overlapping nature of various claims-related operational and oversight activities. erefore, the methods used to routinely monitor overall performance at all operational levels are key in maintaining accuracy, operational efficiency, and financial- exposure transparency.