To: All SPI Contractors
From: Robert Klein
Memo 1106 Monthly Vendor Management Quality Control Report January 2005

As you may be aware Safeguard has implemented a number of internal QC programs that monitor the performance of our contractors.  SPI QC Procedure Write Up

Following please find some of the issues our QC review has discovered.  We want to give you a report on some of the recurring issues we have come across through both our internal and external QC process.  

Securing
Below are some of the most common issues found with securing:  

Missing lockbox/incorrect lockbox combination or non-functioning lock box. 
Incorrect key codes used.
Locking the door with the master PK key (which resets the tumbler).

While a property is being serviced by one of our clients, it is possible we may have more than one work order open at a time.  Appraisers and brokers may need to gain access, and it is imperative that you use the correct key code and lockbox so as not to impede the work they must perform. It is also imperative to ensure that the key placed in the lockbox is one that works in the installed lock. 

Our QC procedures also include inspections by field inspectors to ensure work was done properly, as well as perform required interior inspections. These inspectors gain access through the lockbox.  If the lockbox is not in working order, this hinders their ability to perform the inspection.  

Winterization

Below are some of the most common issues found with winterizations:
 
Failing to place winterization tags on all items winterized.
Antifreeze not visible in toilets.
Failing to drain the back of the toilet (tank) and fill with antifreeze.

When winterization tags and antifreeze are not visible, the integrity of the winterization is in question. Our clients rely on photo documentation to prove to their investors the work was completed according to investor guideline requirements. All of the issues above cause a delay in the transfer of information to our clients. This can cause them to be out of compliance and incur penalties. In addition, Safeguard has to use additional resources as well in opening up follow-up orders and making sure the results come in.

REO Initial Services

Below are some of the most common issues found with REO Initial Service Orders:

Floors not completely cleaned according to the REO trashout guidelines.
Appliances not thoroughly cleaned.

When performing an initial service order for the REO department, it is crucial that you assure the property is in marketable condition. This includes floors being broom swept, mopped and vacuumed. Our clients own the property when it is with the REO department.  Their goal is to sell the property as quickly as possible. Failure to complete the initial services correctly and timely delays the marketing of the property.

In conclusion, if your initial services orders are not completed properly, this can result in delays that affect our clients, Safeguard and ultimately you the contractor. No one makes money when return trips to a property are required to correct an issue that could have been prevented. 

When the above issues occur, it requires additional time of Safeguard's internal staff to address and correct the situation. Addressing these issues ivolves making additional phone calls or opening work orders to send contractors back to a property and prevents the staff from performing as efficiently as possible. In addition, failing to perform work properly can lead to serious liabilities. This can come in the form of a complaint handled by our legal department as well as a demand from HUD for reimbursement or a reconveyance for our client if not discovered and corrected. Any issue reported from a QC inspection is brought to a contractor's attention immediately and it is imperative that it is dealt with right away.

As these issues are tracked, the vendor management department will be addressing any concerns on an individual level with the contractors and escalating those that do not get resolved to the contractor watch program.

Your cooperation to get the work completed correctly the first time is essential to our and your success.

If you have any questions regarding this memo, please contact your regional coordinator. 

Thank you,

Nancy L. Runyon
Vendor Manager