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36 STANDARDIZING PROPERTY INSPECTION AND PRESERVATION SERVICES In neighborhoods across the country there is a mix of homes that are owner-occupied, tenant-occupied or unoccupied. Each of these properties must be maintained to ensure the safety and security of the community. In occupied homes there are owners, landlords, and home owner associations (HOA) that are responsible for maintaining the lawn, repairing broken windows, or keeping the yard free of debris. Many of the unoccupied homes have fallen into some stage of the foreclosure process. e property maintenance of these homes is the responsibility of loan servicers who often contract default mortgage field services providers to perform property inspections and preservation work. While all homes are subject to municipal property codes, properties in default must be maintained in accordance to increasingly varied standards. Many of these standards are determined by loan servicers, the Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA), and other regulatory guidelines for default property. e need to standardize how inspection and preservation work is performed on default properties has long been a concern for field services providers. Following a format drafted by the Mortgage Bankers' Association (MBA) has provided a starting point for field inspection work. However, new universal inspection forms from Government-Sponsored Enterprises (GSEs) has raised expectations of default inspections to include an unprecedented level of expertise. For preservation contractors, there is a need for common guidance due to the increased audit activity as a result of the Federal Housing Finance Agency having oversight of the Department of Housing and Urban Development, Fannie Mae and Freddie Mac. Expanded Services and Evolving Legislation Affect Industry Standards Public sector initiatives on the maintenance of abandoned, blighted, or vacant properties lean toward property restoration. Property restoration may include interior and exterior painting, updating appliances, and flooring. Preservation services, which are carried out by field services providers, include inspections, yard maintenance, and keeping the property secure from trespass. However, new service expectations such as inspectors estimating property damage costs and determining insurance liability ultimately adds cost and extends the foreclosure timeline. Varying service expectations can impact service levels, increase payment disputes, and affect the reconveyance or repurchase of properties. e challenge for national and regional field services providers is to efficiently deliver inspection and preservation services that meet changing guidelines and client requests. Additionally, there is confusion as to who and how field services inspectors and preservation contractors would be trained to comply with advanced service requests. Training vendors changes the client/ independent contractor relationship, which must maintain the 1099 tax status. Another challenge is the use of cost estimating tools. Cost estimators bring a level of standardization and validation to bid-related services, however, these tools base bids on insurance industry guidelines. For the default mortgage servicing industry, these tools are not a one-size-fits-all solution. Many insurance industry cost estimators require bids for each service item requested, but bid approval or denial is based on the entirety of the services requested. Cost estimators may help standardize service costs by establishing a minimum service cost option, but they should be adjusted to meet default mortgage industry requirements. NAMFS Takes on the Need for Standardization of Services Identifying problems associated with varying service expectations is the first step to drafting standard default property inspection and preservation services. e National Association of Mortgage Field Services (NAMFS) has taken on the challenging work of navigating expanded work order requests received by field services providers. e Association's Industry Solutions and Government Relations Committees along with the Membership & Education Committee are working together to provide NAMFS members with updates and to encourage engagement in developing solutions toward standardizing services. Proper training and education is key to creating performance standards for inspection and preservation services. Training through the NAMFS Academy helps field service providers maintain the client-independent contractor relationship. Additionally, NAMFS is working with investor/insurers through in-person meetings and conference calls to discuss the concerns of field services providers in relation to changing service requests. NAMFS is also providing industry information to educate regulators on where federal guidelines, client requests and municipal codes conflict and create compliance challenges for contractors in the field. NAMFS will again bring together loan servicers, regulators and field services providers this fall at the 28th Annual Conference of Mortgage Field Services taking place September 7-9 in Dallas, Texas. About NAMFS: e National Association of Mortgage Field Services, Inc. (NAMFS) is the premier trade association for the mortgage field service industry. We are dedicated to working with all entities of the industry from the Government Agencies and investors that set policy to the contractors and inspectors that perform the work. Learn more about NAMFS by visiting www. namfs.org or email admin@namfs.org. SPONSORED STORY