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Eric Miller Executive Interview


Background

The National Association of Mortgage Field Services (NAMFS) is the voice of the default mortgage service providers, which includes occupancy verification inspections along with pre-and post-sale property preservation services. With the rise of foreclosures over the last several years, mortgage lenders have
more assets to manage that are outside their core competency. Speci cally, foreclosed properties are vulnerable to damage from weather, fines and liens for non-compliance with city ordinances, and chargebacks from insurance companies for non-performance or negligence related to risk management of a property. Eric Miller, Executive Director, NAMFS, is focused on bringing technology solutions to the residential property preservation services market that will mitigate risk, reduce costs, and improve productivity and margins for service providers.


LBX What are some of the challenges facing NAMFS members today?

MILLER Downward price pressure on members is the biggest challenge with lower volumes and increased costs, such as additional data collection/photos, QC/risk, and multiple data entry being a few of the changes experienced. NAMFS members range from individual contractors to large national companies. The diversity within the industry, along with varying requirements, makes it challenging for these different groups to respond to increasing regulations. Additionally, proprietary systems impact the ability to adopt new technologies to benefit all parties.

That’s why NAMFS is focused on helping its members identify industry-wide technology-related solutions that can increase productivity, efficiency, and compliance while reducing cost.

LBX What is the role of weather in property preservation services?

MILLER In 2011, NAMFS identified the need for weather monitoring. Banks had a historic number of properties in default and foreclosure in their portfolios. Systemic issues, as well as the fact that they are not property managers resulted in the lack of scaleable processes in place to mitigate damage to their properties. For example, a servicer would send out an inspector on a monthly basis to check on the property based on documented guidelines. If the inspector reported a flooded basement on the second visit, the servicer would inquire as to how this occurred.

Questions around securing, vandalism, winterization or active marketing might be asked across the different providers: inspector, property preservation contractor, realtor, etc. This could lead to a request to correct the issue at one’s own cost. This issue resulted in many providers using online weather databases to understand the weather history of the property. In the example above, one might have found that the property was flooded due to unusually heavy rains – 7 inches of rain. The timing of the various services provided does not align itself to weather and without active weather monitoring tied to the asset, these events would be reported too late.

Another example is snow removal. Property preservation service providers are constantly being tasked to do snow removal because there are large fines associated with violating city ordinances on snow removal. See Figure 1 for a dashboard review of properties impacted by a snow storm. These ordinances have been on the books for many years, but are being enforced with much higher regularity for various reasons.

Very important are identifying which weather events provide the most risk for servicers, (for example, wildfires in California, tornadoes in the Midwest, or hurricanes on the East coast), and determining the best response to these concerns, whether proactive or reactive to mitigate risk and address damage.


FIGURE 1. Property managers can easily see homes in Boulder County that are impacted by the snow storm, along with Boulder regulations regarding snow removal. Graphic courtesy of Earthvisionz.
FIGURE 1. Property managers can easily see homes in Boulder County that are impacted by the snow storm, along with Boulder regulations regarding snow removal. Graphic courtesy of Earthvisionz.

LBX What types of questions do members need to answer relative to weather?

MILLER Some critical questions are:

→ What was the storm history of the property and what was previously reported damaged and temporarily repaired (i.e roof tarp)? This is important to determine the vulnerability of the property in an upcoming storm to determine action to be taken within the next 7-10 days.

→ What is the acceptable snow load for a particular property? Is there a need to dispatch snow removal service for this roof in light of the latest storm?

→ Is property located in the path of an event (i.e. hurricane, tornado)? See Figure 2 for asset monitoring across the United States.


FIGURE 2. This is a command center or dashboard view of portfolio of assets under management. Graphic courtesy of Earthvisionz.
FIGURE 2. This is a command center or dashboard view of
portfolio of assets under management. Graphic courtesy of Earthvisionz.

LBX Who is responsible for the property damage?

MILLER There are a number of responsible parties: the investor/insurer, the servicer and service provider. In a delinquent situation there is a very specific group of people who are responsible, but they don’t all have the same monitoring tools.

LBX What types of proactive tools are needed?

MILLER One of the most important tools to mitigate a number of unforeseen property-related costs is a real-time weather monitoring solution that takes into account specific property addresses. See Figure 3 for specific addresses of properties mapped to weather monitoring, and Figure 4 for details of the property. We have a member of the Association, V-Alert by Earthvisionz, which we brought to the attention of members through our monthly webinar series.


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FIGURE 3 AND FIGURE 4. Specific properties and property details. Graphic courtesy of Earthvisionz.
FIGURE 3 AND FIGURE 4. Specific properties and property details. Graphic courtesy of Earthvisionz.

As I mentioned earlier, because our members are so diverse in size and resources, solutions we recommend have to be easily integrated into day to day workflow and existing systems while being cost effective. V-Alert is an integrated easy to use application that allows service providers to enter their portfolio of properties and see not only the weather alerts specific to each property but the relevant city, county and state regulations and ordinances for such things as snow removal.

LBX How do you envision V-Alert being used?

MILLER There are many ways that service providers can use V-Alert to advance their business needs. Here are some key benefits to real-time monitoring of specific properties:

a. Business development:
Service providers can identify new business or service opportunities due to an anticipated weather event, and post-weather event damage. The ability to identify potential damage or issues with respect to a specific city, county or state regulations/ordinances prior to performing a physical inspection allows a business to be a better business partner.

b. Early warning and cost savings to client:
While insurance companies, investors/insurers or services can pay out claims for property
damage, they can also issue chargebacks. A chargeback can be due to nonperformance or negligence, not completing the work, and not completing it within specified time, and discovering that the property owner did not take necessary preventative measures.

In the case of government-backed mortgages, nes for noncompliance of regulations or non-performance for missing a conveyance window can be $50-100 per day. These nes often wind up clouding the title of the property, which adds additional costs to then clear the title.

c. Potential for reduced insurance premiums:
We have members who o er insurance services to other members and services on how to reduce insurance premiums. I am not aware of real-time weather monitoring as a condition for reduced premiums, but I could see it as a win-win for both insurers and policyholders. V-Alert could be a new way of looking at insurance and risk management.

d. Top-line Revenue Growth
One must weigh the cost of monitoring a property against the potential revenue or cost that could be incurred while providing services. The revenue is work that came as a direct result of the monitoring. The costs are issues needing to be resolved based on an event that was not reported.

LBX How do you think location-based solutions will inspire a new generation of property preservation professionals?

MILLER They can provide confidence or validation of a service, which will allow our industry to be viewed as professionals, much like appraisers and realtors. These solutions can also allow us to be in many places at once, cover a wider footprint, protect more properties, and feel better about an otherwise challenging business.


EricMillerNAMFSExecDirector

ERIC MILLER

Eric began his tenure as the Executive Director of NAMFS in February 2011. He is focused on bridging the gap between suppliers and servicers as it relates to field service issues. Eric is also committed to growing NAMFS into an Industry Resource for all entities in the Mortgage Field Services Industry.