Servicing Game-Changer
Industry Update
February 24, 2017
HOW FANNIE MAE’S DECISION TO REIMBURSE FOR POLYCARBONATE BOARDING IN PRE-FORECLOSURE COULD REVERSE DECADES OF BLIGHT
INTRODUCTION
For decades, the only choice servicers had when securing a vacant or abandoned property was plywood. Boarding up windows and doors with plywood was supposed to keep the asset safe, but the effect was often the opposite — the boarded-up home advertised vacancy, which invited looting and other criminal activity.
This unsightly plywood fix was bad enough in normal housing cycles, but it devastated whole communities after the financial crisis. As a tidal wave of foreclosures swept through neighborhoods across the nation, it left behind a mass of vacant and abandoned properties boarded with plywood.
Even one plywood-boarded house on a street lowers property values around it, but during the foreclosure crisis, neighborhoods in the hardest hit areas saw dozens of houses boarded with plywood. Property values in these areas plummeted, leading to more losses and more abandoned properties.
Although foreclosures are now back to pre-crisis levels in many cities, the number of plywood-boarded houses that remain continues to depress home values and stall economic recovery in many areas.
A new alternative to plywood — polycarbonate boarding — promises to reverse the cycle of blight while better securing properties. The clear industrial-grade sheet material was developed by SecureView in 2010 and has been adopted by servicers across the country. However, because polycarbonate boarding costs more on the front end, many servicers have continued to use plywood.
But in late 2016 the battle against blight got a huge shot in the arm as Fannie Mae announced that it would reimburse servicers for installing polycarbonate boarding in pre-foreclosure. This one action could prove to be a game-changer for communities throughout the nation, reversing decades of blight.
Source: HousingWire/Community Blight Solutions (Servicing Game-Changer full version)
