The mortgage industry continues to be forced to adjust to new and ever-changing regulatory demands-on both the origination and servicing fronts. This is especially true for servicers and property preservation companies tirelessly working to protect the quality of neighborhoods from foreclosure blight.
Even though the inventory of foreclosed properties is stabilizing, there is still intense pressure to maintain them in a way that satisfies the myriad of local and municipal codes, prompting servicers to reevaluate their Service Level Agreements (SLA’s) with their vendor partners.
Magnifying the challenge, loans serviced on behalf of the GSEs, the FHA, and VA have extensive guidelines, fee schedules, and ever-changing regulatory requirements that servicers must adhere to when protecting and preserving properties.
The guidelines, however, do not include provisions to address all of the potential discrepancies that can result in local and municipal code violations. It is extremely difficult for the guidelines to take into account all of these local requirements.
And yet, with the increase in oversight from the CFPB, and OCC, servicers are required to compliantly adhere to all local laws. When you add in the multitude of regulations, legislation and oversight enacted at the federal, state and municipal levels, the challenge to comply is often overwhelming.
A declining market with great pressure to comply and fewer resources mandate a need for collaboration within the industry. The real answer is a collective effort to devise solutions.
Servicers and asset management companies need to come together to leverage each other’s expertise in a highly collaborative way. One that allows the servicers to meet constantly changing investor and regulatory demands while partnering with the preservation companies to deliver compliant field services in a timely and accurate manner. That’s where collaboration is key.
Property preservation continues to play a vital role for the servicing industry. It’s a role that increasingly includes helping servicers balance investor property preservation guidelines with adhering to federal, state, and local codes.
With the influx of new rules and regulations, property preservation is not just about securing a lock or boarding up a window; it is about preserving the look and overall values of neighborhood properties as if it were your own.
The only way to accomplish this is for servicers and asset management firms to collaborate with one another by leveraging each other’s knowledge, expertise, and network of field service representatives.