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» VISIT US ONLINE @ DSNEWS.COM MARKET PULSE and homeowner associations, but field service providers can Communication breakdown breeds contention between servicers bridge the gap. 2005, with 63 percent of associations experi- encing delinquency rates in excess of 5 percent and one in 10—or close to 30,000 associations nationally—dealing with delinquency rates of more than 20 percent. It is a common misconception that banks or servicers do not want to pay the maintenance fees and assessments required on properties serviced by HOAs. The real problem is an obvious, but not insurmountable communication gap. Servicers often do not know which proper- vacant and foreclosed properties in their port- folios. One aspect of that involves establishing solid relationships with the communities they serve, and that includes HOAs and condo- miniums associations. To establish a successful partnership, all parties need to be on the same page and realize that protecting properties is everyone's common goal. HOAs often remain unaware of the pres- Servicers commit themselves to preserving ties in their portfolios belong to HOAs or do not receive the monthly bills the HOAs send. Additionally, it's difficult for HOAs to identify lien holders or servicers and where to send their bills. In some cases, HOAs turn to local bank branches to get their fees paid or send the bill to the bank they find listed in the county auditor's records, which may not be accurate. The issue has become so severe that HOAs in South Florida have begun to initi- ate foreclosure proceedings against larger ser- vicers who failed to pay the monthly fees on their foreclosed properties. According to an article in the August 12 edition of the Sun- Sentinel, HOAs are frustrated with banks and are taking more aggressive measures to collect their money. "Banks owe a portion of the past-due ervation work field service companies perform on behalf of their mortgage servicing clients, which is another major issue. When trying to complete work at properties that belong to HOAs, field service companies often face difficulties gaining access and are blocked by a gate or security personnel. Field service com- panies' inspectors carry letters of authorization to gain access to these properties to determine vacancy, but security still turns them away. Servicers rely on their field service partners maintenance fees and the full amount from the date they take title to the property, attorneys said. If the lenders fall behind, they're subject to foreclosure just as an individual owner would be," the article states. to keep them in compliance with laws and investor guidelines. These new HUD guide- lines are no different. The servicing industry must utilize its field service companies to gain information on properties and close the com- munication gap, create a system to educate the HOAs, establish a partnership to resolve any issues, and build a national database of HOAs or give them access to servicer records. Bridging the Gap For years, mortgage servicers utilized field service companies to facilitate communications with municipalities across the country to re- 67

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