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53 Tony Maher VP, Business Development, Cyprexx Services, LLC What regulatory issues or impacts are most challenging for the property preservation sector? How are you navigating them? Regulatory issues are the same for us as they are for our clients. We monitor them closely to understand them from many different agencies and jurisdictions. Our clients and our exposure can be costly for the slightest error. Some clients/ states have implemented extra steps before being able to secure a property resulting in extra touches to complete that service (longer posting timeframes, city must sign off on affidavit of vacancy prior to securing). During the COVID-19 era, city offices closed, and it delayed getting permits and sign-offs for repair work. We would like to see more collaboration with the investor community so that we work together to address liabilities. Unlimited liability exposure, especially with FHA work, is an area that needs to be addressed. Adding a liability cap or changing how errors/corrections are approached would go a long way to restoring the supply chain. HUD should set a time limitation for retroactive liability after their inspector has okayed a property In Conveyance Condition (ICC). A recent National Organization of Mortgage Field Services survey identified a significant exodus of vendor partners that provide direct boot-on-the-ground services. Are you experiencing challenges maintaining necessary labor or vendor partnerships, and if so, how are you combatting this? Yes, this is a challenge, but our scale makes this just a little easier to manage. Having been in this business for 30 years, we count on vendors that have a history with us to know that things will change. Many of these vendors are small family businesses and this is what they know best and count on. e foreclosure and eviction moratoria significantly reduced delinquency volumes. e GSEs made changes to their inspection requirements, which reduced their inspection volumes by about 50%. e reduced volumes took a lot of the scale out of the inspection space, and compounding that are the economic pressures that have increased the cost to the vendor network. We are paying vendors separate trip charges that are not reimbursable by investors to get properties addressed quickly, but this is not a solution that we can absorb indefinitely. We have increased our vendor outreach and onboarding efforts to replace vendors who left the industry. Investments in IT platform improvements and paying vendor partners quickly make it easier for vendors to work with us. As a national preservation company, we are in a better position with our scale to manage the challenging environment. However, the reduced scale and increased costs have created a very challenging situation for the regional/mid-size/smaller preservation companies. How are you and your team working to improve efficiencies within the industry to attract and retain new talent and improve the economic model for those that have remained in this sector? Investing in our proprietary technology platform; maintaining a veteran, highly skilled IT department; and constantly creating technology efficiencies and integrations continue to pay dividends in improving productivity. We see some benefits for future efficiencies in AI. However, we still believe there is additional work to be done in this area. We are constantly working with our field vendors to make sure their interactions unfold smoothly, and that they are paid in full and in a timely manner for their services. One thing we've heard about is an ongoing demographic shift to a higher concentration of rural versus urban properties that go through the foreclosure sale process and are taken by the investors/insurers back into inventory. Have you seen this, and if so, what challenges are presented by this higher "As a national preservation company, we are in a better position with our scale to manage the challenging environment. However, the reduced scale and increased costs have created a very challenging situation for the regional/mid- size/smaller preservation companies." —Tony Maher VP, Business Development, Cyprexx Services, LLC