DS News

62 Economists say that although the U.S. has come a long way since the recession a few years ago, we still have significant work to do for the economy to bounce back. Speaking at this year's National Property Preservation Conference in Washington, D.C. on November 5, Leonard Kiefer, Freddie Mac's deputy chief economist, said that the housing market will play a big part in the country's economic recovery. Defaulted mortgage volumes are down, the market has seen significant gains, and housing prices are up 20 percent as the economy continues to improve, according to Kiefer. He predicts that the overall U.S. economy will improve in 2015. What is difficult to predict is how this new, highly scrutinized era in housing will impact the market in the coming year. Regulations and new legislation have been implemented quickly to ensure borrowers and communities are protected, but we are navigating unchartered waters as the industry tries to regain the trust from borrowers and manage these new directives created by investors and regulators. It is difficult to forecast, without a crystal ball and a little magic, what the future holds for mortgage servicers and the housing industry. What we can do in the field services industry is provide support and implement processes and controls to ensure compliance for our mortgage servicing clients. As we prepare to enter the new year, the field services industry also is faced with new challenges, all of them centered on the heightened scrutiny from investors and regulators. Servicers are taking a deeper dive into the operations and processes their field services partners utilize to stay in compliance with these new and expanding requirements. As we enter the new era in housing, field services companies must stay ahead of the curve by focusing on compliance and quality control, utilizing new technology, ongoing internal training programs, and learning opportunities in vendor management. NEW REGULATORY ENVIRONMENT LEADS TO INDUSTRY CHANGES Local ordinances are a big theme in 2015. Cities are getting more aggressive in passing and enforcing legislation and codes, and investors require that field services companies follow all of these local laws and ordinances. National businesses are challenged to comply with the thousands of regulations across the country, even when they contradict some of the requirements from servicing clients and investors. For example, one city ordinance requires field service vendors to use vegetable oil in the winterization process. e city claims this needs to be done for environmental reasons; however, vendors are specifically instructed by our clients and investors to use antifreeze. It's a no-win situation. Either method field servicers choose to utilize, they will be performing work that is out of compliance. Bonds are another emerging trend in municipal regulation as cities try to cover the cost of maintaining abandoned properties. Several cities across the country have implemented these bond ordinances, requiring servicers to pay up to $10,000 up front for each abandoned property in case any code issues arise. If something needs addressed at the property, cities use some of that bond money to cover the cost of the work. Once the property is sold, any leftover funds are returned to the servicer or bank minus an administrative fee that varies by city. is is a great example of cities being unaware of the role of field servicing companies in maintaining these properties. In 2015, field services companies will be challenged to continue outreach and education of municipal officials across the country. On the state level, several have created regulations that specifically target property preservation rather than the servicers or banks. For example, Maine recently passed legislation that requires field services vendors to be licensed as debt collectors. Again, many of these I N D U S T R Y I N S I G H T / A L A N J A F F A SURVEYING THE FIELD: THE FUTURE OF FIELD SERVICES P

• Cover