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Field Services Evolution

Safeguard in the News
August 4, 2015

IN THE FIRST QUARTER OF THIS YEAR, THE TOTAL NUMBER OF FORECLOSURE FILINGS IN THE U.S DROPPED TO THE LOWEST NUMBER SINCE 2007, ACCORDING TO REALTYTRAC. BUT THE AVERAGE NUMBER OF DAYS IT TOOK TO COMPLETE A FORECLOSURE ROSE TO A WHOPPING 620 DAYS NATIONALLY, AND IN SOME STATES FORECLOSURES TOOK LONGER — MUCH LONGER.

In New York, the dubious winner of the nation’s longest average time to foreclose, it took an astounding 1,475 days to complete foreclosure. That’s more than four years. Which is why proper-ty preservation companies, despite a lower number of foreclosures overall, are still vital in managing risk for lenders. A lot of things can happen to a property in 1,475 days.

And as the field services industry continues to ride the REO boom and bust cycle, it’s under increasing scrutiny from in-vestors, communities and regulators to deliver top-tier service within strict guidelines. Companies have adapted to this new REO environment by finding innovative ways to do the import-ant work of protecting and maintaining assets.

THE RISE OF MOBILE
Investors today crave certainty, the kind that results from lots and lots of data points. To provide that degree of assurance, field service providers have taken data collection to a whole new level. Forget the stereotype of a field servicer walking around with a clipboard and a camera. Just in the last 12 months, the explosion of available real-time data is driving a new model of field servicing that would have been unrecognizable in the past.

For example, last year Safeguard Properties received about 100,000 photos from the field every day — an impressive num-ber. Today, with 94% of its vendor base using mobile to submit information, that number has climbed to more than 1 million photos a day, a 900% increase.

“Mobile has been an unbelievable factor in delivering richer and more timely data,” said Alan Jaffa, CEO of Safeguard Properties. “A lot of our clients get hourly or even more frequent data feeds from us.”

The speed at which servicers can get information from their vendors is a key factor in quality control, Jaffa said.

“Investors today are reviewing property information with a fine-tooth comb. The entire review process has been extended, and investors are not looking to wait for weeks to get that information,” Jaffa said. “Our vendors are under scrutiny to get that information back quickly.”

With mobile apps, Safeguard vendors are able to share data almost instantly, and pictures and property specifics are reviewed during the same day.

“There’s so much detail we now provide to our clients. Years ago, having photos of every single bedroom wasn’t as critical, but today it’s not just photos, but smart scripts that ask all the right questions to get the most up-to-date position on the property,” Jaffa said.

That kind of information is an essential ingredient as lenders manage third-party vendors. The Consumer Financial Protection Bureau has made it clear that financial institutions carry all the risk when it comes to what they outsource, and field service providers are keenly aware of their role in compliance.

For Ron Briggs, senior vice president of business development at Aspen Grove Solutions, the only way to comply is by lever-aging technology to deliver what investors and regulators are looking for. “Technology is the great enabler when it comes to introducing predictable, repeatable and auditable processes that satisfy business and regulatory needs,” Briggs said. “We provide our clients with the ability to know who was at a property, when they were at a property, and through the use of a standardized criminal background check, the person’s pattern of past behavior.

“Through the use of our technology, our clients can measure the quality of the vendor’s work, which can lead to additional training so vendors are equipped to do the best possible job. As such, technology, the business, and regulatory needs are aligning to provide line of sight from work assignment to service delivery at the property.”

The rapid transformation into a tech-centric model has shifted the role of the front-line workers in field services. As more people review the files, there is more emphasis on accountability. But the new model benefits these workers as well.

“Our subcontractors used to spend 12 hours in the field, and then spend another four hours rekeying that information,” he said. “Technology has enhanced the way they do business and they love it.”

The evolution of the way properties are secured and maintained comes at the right time for communities that are demanding greater transparency into the process.“

Just to protect and preserve a property may not be enough anymore. How we did that five or 10 years ago looks very different than what we need to do today,” Jaffa said.“

Cities across the country are not interested in hearing who owns the property — the fact that the bank owns it isn’t the issue. The issue is that this property has to be maintained like any other property on the block.”

By maintaining properties to community standards, communities are improved while assets are protected and preserved. It’s a win-win for all parties. “Technology is the great enabler when it comes to introducing predictable, repeatable and auditable processes that satisfy business and regulatory needs.”

The biggest challenge in field services is the ever-changing regulatory environment and scrutiny the mortgage servicing industry is under. This scrutiny not only affects mortgage companies, but cascades down to field services companies and our vendors and employees.

Although these new regulations and laws create a challenge for us, they also provide opportunities to partner with clients and continuously improve processes and procedures. We must take additional measures to ensure our mortgage servicing clients remain in compliance.

We are committed to investing in new technologies, and new regulations encourage further innovation in that regard. It also includes additional controls for our vendors in the field by using geo location technology and smart scripts in Safeguard’s proprietary mobile applications. Soon this may include video, as we begin testing its use in the field. The results are improved quality and efficiencies for us, our vendors and clients.

Additionally, Safeguard is increasingly participating in both annual and periodic audits with clients, largely as a result of regulations now requiring increased monitoring of service providers. These audits are beneficial, and Safeguard uses them as a way to partner with our clients to identify areas for improvement. We also conduct our own internal audits to ensure we are meeting our clients’ expectations prior to their requests for information, in addition to conducting audits on our vendors to ensure quality and efficiency.

Safeguard just celebrated 25 years in business. What has been key to thriving for so long?

Our success and reputation in the mortgage field services industry are built on a fundamental commitment to customer service, a sense of responsibility for the work performed, and a clear and comprehensive understanding of the investor and insurer compliance issues that affect the mortgage industry.

Founder Robert Klein’s vision was to create a company focused on client satisfaction through business partnership. He created “Customer Service = Resolution,” which is more than a motto. It is a promise to our clients that we will deliver services at the highest levels of quality in the industry.

We are committed to building and sharing industry best practices to protect the integrity and value of our nation’s housing stock, to deliver the most efficient and cost-effective services in the industry, and to work on behalf of our clients to comply with all regulatory requirements.

Safeguard also is committed to providing innovative solutions through our investment in new technology. Through mobile adoption by our vendors, investing in data centers and piloting new technology like video in the field, we continue to ensure quality and innovation for the mortgage servicing industry.

What are the consequences of fast-track legislation for our industry and why was it important to create a Fast-Tracking Legislation Resource Center?

Robert Klein has been a leading proponent of the concept of fast-tracking vacant and abandoned properties, bringing the topic to the forefront by fostering meaningful industry dialogue. The Safeguard Fast-Track Legislation Resource Center is a tool to further assist servicers and communities in finding a solution to the vacant and abandoned property issue.

The interactive map features states that have enacted, are contemplating enacting, or have expired/inactive fast-track legislation for vacant and abandoned properties. Information includes a link to the final bill’s text, legislation history, and links to any media coverage of the legislation (if applicable).

An important component to fast-tracking vacant and abandoned properties is the ability to determine if a property is a candidate for the expedited process. To help with this determination, the center also highlights definitions of “vacancy” or “abandoned” within each piece of legislation.

Most importantly, the fast track legislation initiatives around the country are designed to ensure that vacant and abandoned housing stock can be brought back to useful life, thereby minimizing blight in the communities where they exist. Obviously the ability to make that asset available to a family that will care and love that home is so important to eliminating blight, assuming that all steps have been properly taken to ensure that the foreclosure was handled properly within the legislation.

We felt it was important for Safeguard to take the lead and invest the time and resources in researching and consolidating fast-track legislation so that it can be easily shared. Lawmakers and business leaders are searching for ways to rebuild communities and our hope is that this tool will be a useful resource to help stabilize at-risk neighborhoods and stem blight.

One of Safeguard’s community initiatives is to educate municipal leaders about property preservation best practices. What kind of results have you seen with this outreach?

Our intent is to provide an overview of the servicing industry’s best practices in preserving vacant properties.

Creating channels of open communication continues to be the biggest challenge for code officers, yet it is attainable. We created Compliance Connection, an innovative technology solution that connects code officials to the servicing industry. By becoming familiar with banking and servicing procedures, local code enforcement and building officials have been able to identify and communicate directly with the proper loan servicer through this technology. This eases the frustration of not receiving a response to their warnings and violation notices that may have been unintentionally sent to the wrong parties.

Please click here to view Field Services Evolution [pdf].