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62 foreclosure moratoria or forbearance. It's not just about volumes, as Breedlove explained. Like countless other industries both nationally and globally, property preservation is suffering from labor shortages combined with an ongoing increase in the cost of materials. Although the price has moderated in the last few months, for example, Chicago lumber futures traded at $707 per thousand board feet in late October. at's less than half of a record high of $1,711.2 hit in May, but still well above pre-pandemic levels of around $400. A tight labor market and wildfires in western Canada have only worsened things, especially when combined with supply-chain issues. e cost of other building materials has also increased significantly since 2019, although without the dramatic price swings of lumber. For instance, one of the large chlorine plants in Lake Charles, Louisiana, was damaged during Hurricane Laura, resulting in a shortage of chlorine, which then impacted property preservation companies that handle pool maintenance. For property preservation companies, 2021 has presented a mosaic of broad economic impacts alongside more localized issues that may spider-web out into more widespread consequences. "Typically, when there's an increased cost and goods, whether that be through materials or labor, that's passed on to the end-user, whoever that is," Breedlove said. "We see that in new construction, remodels, etc. However, on the property preservation side, most costs are fixed." Although there is a process in place that allows vendors to submit allowable increases to the Federal Housing Authority, Breedlove noted that "when inflation is hovering around 5%, it's unrealistic to request that on all services, even though [costs of ] inflation, materials, and labor impact all services." Since the low-volume environment results from issues beyond any property preservation company's control, Mosley told DS News that MCS has used this slower period to ensure it is ready for when volumes do return to more normal levels. Further complicating matters is a trend toward consolidation that has been at play throughout the property preservation sector. Mosley pointed out that decreased volumes, after all, are not solely the offspring of COVID-19. ose volumes have been well below the heights seen after the 2008 financial crisis for years. When combined with a robust economy in 2018 and 2019, the property preservation sector was already experiencing a consolidation trend well before the word "pandemic" became a staple of the evening news last year. at consolidation meant fewer companies to choose from—a challenge for servicers, according to Candace Russell, VP of Post-Sale, Carrington Mortgage Services. "ere's good and bad in having the industry consolidate," Russell noted. "New companies can bring new ideas to the table, and they have different ways of sourcing their boots on the ground." When confronting these numerous challenges and figuring out how to do more with less, property preservation has turned to the same resource as countless other industries over the past 18 months. When in doubt, turn to tech. LEVERAGING TECHNOLOGY WHILE MAINTAINING THE HUMAN ELEMENT Breedlove told DS News, "We focus on the end-user experiences as much as possible to try to find efficiencies to help our vendor network out." For example, Breedlove noted that because vendors' team members might need to spend more time getting from property to property," properly leveraged technology can hopefully help release some of the pressure by allowing those workers to spent "less time with some of the administrative tasks." Ensuring that communications are swift and efficient can help streamline processes, perhaps requiring only one trip to a property rather than several, thus saving the contractor or other vendor valuable time. "We want to make sure we have those strong relationships with our vendors as well," Breedlove said. "It's not a 'rep code,' it's a person named Phil or Fred or Susan. It's not a number; it's a property. It is imperative that you do not get too disconnected to the end-user experience in our situation—from the vendors." MCS' Mosley echoed that sentiment. "We see our vendors as our lifeblood and treat them as business partners," Mosley said. "We have a lot of tenured vendors in "One of the biggest challenges is that the rules and guidelines are always changing. 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?" —Elizabeth Squires, Director of Client Account Management, Safeguard Properties Cover Story By: Phil Britt

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