Due Date: What’s the Rush? by Joe Hummel
Today, Property Preservation provides a widening variety of services on vacant, distressed and foreclosed properties. The companies performing this work are bound by many guidelines for the completion of the services and are aware of potential fines and penalties if the work is completed incorrectly.
In some cases, others fail to identify and adhere to some basic guidelines, and many question actions taken by their client(s). One major guideline violated is what I consider “prompt service”. In the case of prompt service, we can refer to the uncontested “Due Date”. Many see the short deadlines to complete work and the excessive use of “Rush” work orders so often that the due date does not really mean anything to the contractor – they are all rush orders! The continuous overuse of rush orders, and the receipt of already past due deadlines, have forced many contractors to understand that a work order received has only one due date, typically 72 hours. Many contractors fail to see that the Rush due date means something to this particular process in MFS.
This poses a problem with work completed by HUD requirements as our clients have responsibilities to the property mandated by the insurer. That date is on someone’s calendar. We, as contractors, must provide timely service to each property consciously understanding each aspect of the process is crucial for all parties involved with each asset. I am only identifying one. Completing work within due dates and communicating with your client when work is received past its deadline. Keep track of those work orders that are past due and reassigned.
I am referencing a HUD guideline below as it is a warning regarding late and inaccurate reporting, and a breakdown of possible areas of fault. This is not new information, but could pose issues in the near future if not already.
“Damage Due to Failure to Preserve and Protect (Mortgagee Neglect) HUD will hold the mortgagee liable for property damage or destruction to vacant or abandoned property resulting from the mortgagee‟s failure to take action to preserve and protect the property. This failure to preserve and protect is considered mortgagee neglect. Examples of mortgagee neglect include, but are not limited to, the mortgagee‟s failure to:
a. Adequately verify the occupancy status of a property; b. Initiate foreclosure within the required timeframe; c. Obtain timely and accurate property inspections; d. Promptly secure and continue to protect all vacant properties; or e. Promptly notify the MCM of receipt of code violations, demolition notices and/or take appropriate action.
Mortgagees may use any qualified individual or firm to perform P&P services on properties that were secured by FHA-insured mortgages; however, the mortgagee remains fully responsible to HUD for its actions and the actions of its agents, individuals and firms that performed such services.”
After reading this information from the ML 2010-18, it is important to understand the responsibility falls on how adequate information can travel to accomplish timely and accurate reporting. A contributing factor is how many hands touch it before HUD gets it. Aside from the requirements, I now have a sense of accountability. I understand HUD will hold the mortgagee liable. Subsequently, that means eventually I (as a company) may be held responsible. I have a huge impact on bullets A, C, and D. How can I ensure I am doing this correctly? This is a question others should be asking, considering the dollar amount in penalties being disbursed. The amounts are enough to cripple a business.
I am seeking a proactive approach to prevent such delays that lead to monies lost. I read from others dealing with similar situations of charge backs/admin fees for not completing work on time but the order is past due prior to receiving it, or because the work order sat idle due to weather, but chargebacks are threatened to complete work. And, due to poor communication between client and field, the progress is delayed even more. Each says it’s the other guys fault! All this costs everyone money. I always challenge everyone’s internal structure first.
We know that our internal processing must work efficiently enough to transfer data effectively, regardless of the work type that was ordered. On a small scale, this seems easy. When you actually perform it, you realize the required information to be reported accurately – individual teams physically accessing the property, transmitting information to your offices with technology, and relying on an internal office staff interpreting information – you run the risk of missing your due date. **Chargeback** The seemingly simplistic systems are more complex these days in order to mesh with technology. To match policy and requirements, one has to think radically about how well he reports, and how fast he reports it. Then test it.
I encounter this type of battle each day, and I have a great understanding of the stresses involved trying to coordinate a project and adhere to timeframes. I chose this industry.
There are others that are willing to help with problems like this. https://www.linkedin.com/groups/Cubic-Yard-Property-Preservation-REO-6551906?trk=my_groups-b-grp-v . One place to find positive insight on common problems costing valuable dollars daily. If you do not use a form of social media to promote your business I assume you will never read this to begin with, so for the rest of us… Join a group and ask a competitor, or a client.