These memos are posted to ensure that our contractors are getting up-to-date information on significant issues. We welcome any comments or questions regarding the memo feature.

Memo 1152 The Importance of Photo Documentation and M&M Demand Issues
To: All Safeguard Contractors and Inspectors
From: Vendor Management

Photo documentation has been at the forefront of discussions at nearly every industry conference, regardless of who is in attendance (contractors, servicers, investors). When adequate photo documentation is not provided to support work completed at a property, our clients suffer monetary consequences for non-compliance with the investor guidelines. Strong supporting photo documentation includes not only providing clear before and after photos of work performed, but also photos that fully depict the condition of each room in a property.

Strong supporting photo documentation is also Safeguard's best defense to disputing claims of non-compliance. Within the past six months, Safeguard has received an increased number of HUD Non-Performance and Demand Letters citing a failure to perform work. Memo 1113 HUD Non-Performance Letters lists common reasons for the issuance of these letters by the M&M contractors.

Clients have been reimbursed over $61,000 in the past six months because missing photo documentation left many HUD Demand Letters indisputable. This financial loss in itself is unacceptable, but more important is the credibility loss sustained from failing to provide supporting documentation that the work was performed in accordance with the investor guidelines.

Reimbursement to the client has ranged from a $75 winterization to thousands of dollars for roof repairs.

• A recent HUD Demand Letter resulted in a reimbursement of $9,250 for failing to provide adequate photo documentation of roof repairs. When the contractor was asked to provide better photos, none were available. Some additional examples are listed for review below. Please note that in each case, items were not reported by Safeguard's contractor when they were initially at the property.
• Contractor bid and removed 25.5 gallons of paint for $255. The M&M contractor reported five gallons left on site and demanded the full $255 be reimbursed.
• Contractor bid and removed exterior grill for $65. M&M contractor discovered an additional interior grill (that was not reported or bid by our contractor) and demanded reimbursement.
• Contractor bid and removed mower for $75. The M&M contractor reported an additional mower on site (that was not reported or bid by our contractor) and demanded reimbursement.
• Contractor bid and removed 4 tires for $72. The M&M found two additional tires on site and demanded full reimbursement.
• Each of the examples above would have been disputed with full photo documentation of each room, exterior yard, and outbuilding at the property. It is imperative that contractors adhere to photo requirements to avoid the issuance of HUD Non-Performance and Demand Letters and ensure payment for services provided.

In addition, photos depicting the action (or during the process) are required to support work completed. For example, a photo of the air compressor hooked up to the lines while they are being blown free of water during the winterization process is required. If this photo is not provided, payment for the winterization will not be issued.

The damage financially, as well as to the credibility of the contractor and Safeguard cannot continue. Memo 1133 - Photo Documentation Manual was released to provide guidance to contractors on acceptable photo documentation for a variety of work performed and must be referenced often to ensure compliance to photo requirements.

The HUD Initial Inspection Form is another tool that should be used by contractors in the field when reporting a property in convey condition. This will ensure that the requirements are met and that HUD will have no basis for issuing a Non-Performance or Demand Letter.

In addition to ensuring payment, comprehensive and accurate photo documentation is often referred to as a "cheap insurance policy" for contractors and inspectors. Adequate photos of each room, exterior yard, and outbuilding at the property will assist Safeguard in disputing claims of damages not reported and assist contractors in resolving frivolous lawsuits filed by homeowners.

Thank you for your cooperation and understanding of the importance of photo documentation that is clear and accurate in depicting how work was performed and the condition of all areas of a property. Safeguard continues to release our memo updates to ensure protection to contractors, clients, and Safeguard to continually foster cooperation in working to best service a property. If you have any questions regarding this memo please reply to vendor.management@safeguardproperties.com.