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35 December 2024 F E A T U R E S T O R Y December 2024 ยป compliance and sometimes client edu- cation, to ensure we can work with the Code Officer to abate safety and health issues, as well as keeping the property maintained in such a way that it doesn't cause neighborhood blight. Fees for failing to manage this properly can be up to $1,000 per day. Q: How is climate change im- pacting property preserva- tion, particularly in regions prone to natural disasters? The industry has to be ready for anything! The United States has had our fair share of natural disasters this year. The Pacific Northwest is on target for a "first of its kind" weather event that is deemed to be similar to a hurricane. Being successful in the industry requires a dedicated team with project managers and a playbook on how to implement, deploy, and execute a strong disaster re- sponse in all parts of the country. Being ready, and constantly monitoring your playbook and team, is mandatory. Anthony Scotese First VP, Production Operations, ServiceLink Q: What are the biggest chal- lenges facing the property preservation space and how you do business? The biggest challenges facing prop- erty preservation and how we do busi- ness include the impact the long-term inflationary market has on the cost of goods, along with increased insurance expenses and declining default volumes year over year for the last decade. Asset density has plummeted and allowables (rates) to complete preservation work have not increased significantly enough to meet this shift. Turnaround times also have not been adjusted for the signifi- cantly lower volumes. This has caused a lot of preservation contractors to leave the industry or rely more heavily on oth- er lines of business to stay profitable. Q: How are prop pres com- panies having to adapt to meet these challenges? We have partnered with industry trade groups to sponsor pricing increases across the entire industry and have been able to drive two allowable increases in the last 24 months. We're continuing to partner with these groups to sponsor pricing increases for additional services. We're hopeful this will yield some relief in the near future. Where allowables have been increased, we partner with our network to share in the increases to ease the burden of rising costs of material, technology and insurance. Q: How have market condi- tions, such as shifts in inter- est rates or the overall economy, impacted the property preserva- tion landscape this year? In general, the preservation industry as a whole has continued to see declin- ing default volumes based more on the increase in loan workout options that expanded the waterfall during and since the COVID-19 pandemic. Higher inter- est rates and a sputtering economy have not impacted volumes for preservation but have caused significant stagnation in the housing market as a whole. Q: What primary new tech- nologies or innovations are property preservation companies adopting to improve efficiency and service quality? How is AI impact- ing the sector? The use of image recognition and intelligent document processing has started to take off in the preservation space and is a trend I've been tracking closely. The anticipated impact of this technology is that it will allow for better identification of risk factors and re- al-time quality control that is far beyond the breadth of what can be accom- plished with manual reviews. Q: How are you adapting to the need to service more remote/rural properties, necessi- tating more "windshield time?" Through aggressive recruiting and the targeting of key municipalities that minimize the windshield time associat- ed with low-volume density in rural ar- eas, ServiceLink has grown its network by 30% and reduced windshield time by over 50% while utilizing local contrac- tors to perform preservation services in difficult-to-manage areas. Q: What are the keys to navigating local, state, and federal regulations impacting the property preservation industry? In ServiceLink's Field Services division, we have a dedicated regulatory oversight team with decades of com- bined industry experience who monitor changing regulations at the local, state, and federal levels, including legislation and court cases that are in progress. This helps us stay on the cutting edge of where the industry is heading from a compliance standpoint and allows us to prepare and swiftly address changes to keep our client partners in compliance. Q: How is climate change im- pacting property preserva- tion, particularly in regions prone to natural disasters? Natural disasters are happening more frequently. We've seen it this year with Hurricane Beryl being the earliest Category 5 hurricane in the Atlantic Basin's history. We've seen it with the large-scale devastation brought from Hurricanes Helene and Milton. Lenders and servicers alike need to be prepared, and this means partnering with the right property preservation provider who will meet your individual needs. It's important for us to have a national presence with response teams that can travel across state lines, if needed, to en- sure our clients receive prompt action, including disaster inspections and work toward remediation.