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» Shari Nott Chief Executive Officer NATIONAL FIELD NETWORK Changing the way networks are developed and built to improve the oversight and partnership with the field personnel. While foreclosure alone has no effect on crime, violent crime increases by more than 15% once the foreclosed home becomes vacant. Source: University of Pittsburgh, Department of Economics Marc Hinkle SVP of Operations and Vendor Management MORTGAGE CONTRACTING SERVICES Back to Basics Although the strategy may seem simple, creating a compliance chain is one surefire way to ensure nothing is left to chance. Reasonable minds may differ on where the housing market will go in 2014 and whether our current recovery (such as it is) is illusory or the beginning of something more robust. But there is little doubt that in 2014, regulatory compliance will demand considerably more oversight. Since the Consumer Financial Protection Bureau (CFPB) issued its April 2012 "shot heard 'round the industry" bulletin—alerting providers throughout the mortgage servicing chain that they are liable for the activities of every contractor and subcontractor below them—the property preservation industry has focused on compliance efforts and protecting its financial institution clients from exposure. Given the property preservation industry's reliance on a nationwide network of vendors, many of which are individuals or "mom and pop shops," compliance efforts can best be described as granular. We must ensure that every lawn mowing, winterization, and inspection is not only performed at a specific property, within a particular time frame, and at an acceptable quality level, but we must also ensure that the person doing the work has the field service provider's seal of approval. Given the number of vacant and defaulted properties still on the market, that task gets bigger each day. INSIDE THE BELTWAY The compliance issues that field service providers are most likely to encounter— and issues that can spread to their servicer clients—stem from the methodology that is used to recruit, train, and manage vendor networks. To mitigate compliance issues down the road, the relationship between field service providers and their contractors in the field has to be established from the start of the engagement—like any other first impression—and it doesn't just stop there; it's a continual process of nurturing, mentoring, managing, and guiding your field service personnel and solidifying that partnership. One of the shifts that should happen, as an industry, is a departure from considering ourselves to be an "ordering vendor portal" and instead think of ourselves as managers of field service work. So rather than just ensuring 8,000 people signed up as part of your vendor network, it's more important to have 3,000 talented, skilled, and properly vetted members of your network. The emphasis should be on quality over quantity. With that comes building a partnership and evaluating the business model used to define the relationship. For example, shifting away from a contractor or sub-contractor model to a more proprietary franchisee/ franchisor model, not as a revenue-generator but more as a means to define and develop the relationship with those in the field; there is no cost or expense to be a member of the network under this type of arrangement. The value it brings for both parties is simply to foster the relationship and strengthen the bond between the service provider and their partners in the field. Once you establish that relationship, it needs to be a fair and equitable, two-way partnership. If the vendor network isn't adequately compensated then we would expect to see increased compliance issues. By coming PROPERTY PRESERVATION INDUSTRY INSIGHT Fielding Compliant Relationships up with and maintaining a different business model, it allows people to be properly compensated for their efforts in the field. It's a risk mitigator. It's no different than if you hire somebody for $9/hour and expect them to be a manager; you're probably going to have some problems internally. Managing the external workforce needs to be akin to managing the internal workforce, which means evaluating true and fair compensation for the work done. It needs to be a winwin for both sides. Loyalty—and as a result, retention—is in short supply when it comes to folks in the field and vice versa. But you can build that rapport with a different kind of business model that fosters a cooperative—and compliant—partnership. Shari Nott launched National Field Network in 2010 after 20 years as a senior mortgage operations executive. She assembled a team of highly experienced managers who've worked in the industry as both servicers and clients, and together, they've developed the private-label field service solution. COVER STORY PROPERTY PRESERVATION VISIT US ONLINE @ DSNEWS.COM The Four W's Complex a challenge as this may be, our efforts are rooted in an exceedingly simple notion: ensuring that the vendor is doing what we want him to do, where he's supposed to do it, when he's supposed to do it, and that the person who is doing the work has the proper training, licensing, and background checks. We call that our four W's. Fortunately, there is already sufficient technology to ensure that three of the W's— what, where, and when—are being met. That's because mobile technology, supple- 49

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