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55 model approach, which was created to tackle this exact kind of challenge. MCS will continue to utilize existing vendors and recruit new ones at the local level while combining that with our complementary network of self-performing regional service centers. We're confident this unique hybrid approach will ensure our property preservation operations remain strong. Thomas O'Connell SVP, Default Management, Planet Home Lending What regulatory issues or impacts are most challenging for the property preservation sector? How are you navigating them? e most challenging regulations the industry is experiencing are vacant property registrations and zombie property statutes. Ensuring compliance with each state, county, city, and sometimes township is a difficult task that requires a significant investment in resources. We mitigate the impact by maintaining effective tracking and reporting, so we avoid significant fines and penalties. Additionally, we ensure property preservation vendors comply with timing, posting, and preservation requirements. Lastly, we have experienced benefits in avoiding fines and penalties by communicating directly with the code enforcement officers. 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? We have heard about delays in completing conveyances due to a lack of contractors in certain areas. is means that preservation vendors find it difficult to complete work within established timelines. To date, this has not been a significant issue for Planet, but we are monitoring this and communicating with our property preservation vendors. 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? We rely on Power BI and data analytics to enable staff to successfully manage their work queues and to highlight what's important to focus on. To retain employees, we work hard to create a positive work environment. Planet's culture is diverse and inclusive. at leads to high employee engagement, which helps us retain employees. People stay where they're valued and see opportunities for career growth. 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 concentration of properties in "hard to serve" areas? is trend has been happening over the last couple of decades as the population has been moving to urban/suburban areas for more opportunities. e pandemic may have slowed this trend when employers went to a remote- work environment. Foreclosures and REOs in rural areas have always been difficult because of the availability of contractors, uniqueness of the properties, and extended hold times in REO resulting in deterioration of the property. e keys to managing those challenges are vendor oversight to ensure contractors are performing, obtaining multiple bids, and assessing both marketability and the type of buyers to determine the level of repairs if liquidating through REO. "The most challenging regulations the industry is experiencing are vacant property registrations and zombie property statutes." —Thomas O'Connell SVP, Default Management, Planet Home Lending