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64 at delays the start of any needed repairs. Some other states are developing similar rules. As such, Russell told DS News that Carrington tries to work with local code enforcement officers or municipal regulators to get a property secured by them, but this can be a cumbersome process. Carrington also works to keep investors informed about any expected delays or potential pitfalls. Safeguard's Squires noted that it was much easier when there was a blanket rule for the entire country. "One of the biggest challenges is that the rules and guidelines are always changing," she explained. "If someone is in forbearance, is the investor allowed to initiate contact? How should that contact be made? How do you stay engaged for loss mitigation efforts?" Squires added that it could get even more complicated when considering what type of loan you're dealing with. "It's understanding how to service a Fannie Mae loan versus servicing a VA loan, what those requirements are, and making sure you're fully aligned to all the rules and regulations that might be specific to that investor," Squires continued. "Along with different investors, every state potentially has different guidelines on how to service properties." Mosley noted that FHA, Fannie Mae, Freddie Mac, VA, and USDA each have their unique requirements. "ey're complex, and ensuring compliance with those is challenging," Mosley said. "We've built a team that has the knowledge and the experience to execute on those investor insurer requirements, to ensure that our clients and their portfolios are compliant with those with those requirements." ere are also still different rules for real estate owned (REO) properties, Russell said. REO poses unique challenges from the investor front: some want the property sold quickly, while others would prefer to wait to maximize the potential revenue. e investor's interest will determine how extensive any repairs will be. Regulatory compliance has become significantly more complex since the previous financial crisis, Mosley said. Still, he reiterated that focusing on people, processes, and technology would enable companies to best walk that tightrope. As with other hurdles, technology also has a vital role to play when it comes to maintaining compliance, Squires suggested. "Our system is programmed with all of those rules and regulations—allowables, the type of work the investor expects us to do upon first visit, how much money we can spend, and where they expect us to submit a bid or allowable request. So, our system is programmed with all those things, so when we send a vendor out into the field, the system looks to see what type of loan it is." Squires said that Safeguard's system also considers the time of the year: whether the vendor is being sent out during winterization season, in grass- cut season, etc. e system includes all the details and investors' expectations, including everything the vendor needs in the work order. "at's where technology's helpful because the system does keep track of all those different rules," Squires said. LOOKING AHEAD Supply chain challenges, regulatory hurdles, and other bottlenecks should ease in 2022, according to Breedlove. "e labor and material shortages should subside, but they won't go away entirely. Today's rate of home price appreciation is likely unsustainable." Higher interest rates, which most economists foresee for 2022, will result in other challenges, Breedlove added. e state and municipal regulatory nuances will remain an uphill battle, Russell suggested. She noted that this is why Carrington works closely with the Five Star Institute and other industry groups to spur conversations with all stakeholders, in the hopes of knocking down hurdles and inspiring positive change. Another area of risk and concern is insurance rates, Breedlove added. e National Flood Insurance Program is going to a model that's more reflective of actual risks, so the premiums will likely increase substantially—especially in places like parts of Florida. e revised flood zone maps should also be more inclusive. Proper preparation during low-volume times such as these can make the difference between success and failure when those volumes rebound, Mosley said. "One of the things that we have been very focused on is having a healthy vendor network, in terms of the number of contractors and inspectors—making sure that we're right-sized with the right people in the right areas to do the work that that that we're contracted with our clients to do. We want to make sure we're ready for the uptick in volume next year." He then added, "But just as importantly— maybe more importantly—we need to ensure that our vendors are strong and ready for that change as well." Phil Britt started covering mortgages and other financial services matters for a suburban Chicago newspaper in the mid-1980s before joining Savings Institutions magazine in 1992. When the publication moved its offices to Washington, D.C., in 1993, he started his own editorial services room and continued to cover mortgages, other financial services subjects, and technology for a variety of websites and publications. Cover Story By: David Wharton "There's good and bad in having the industry consolidate. New companies can bring new ideas to the table, and they have different ways of sourcing their boots on the ground." —Candace Russell, VP of Post-Sale, Carrington Mortgage Services

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