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Richard Dunne of HUD has called an August 14 meeting of industry organizations
including SIRs, NAMFS and SOFI. While Richard Dunne has asked for agenda input, the exact agenda will be determined by HUD
and be announced at a later date. John Cahill, SIRs Government Liaison, has offered that pressing industry issues be addressed
and included suggestions were: dump receipt weight requirements, ML2002-10 and 2003-05 interpretation variances, full-scale
audits of service invoicing, and re-address of "negotiated" fees issues.
There has been significant turmoil within the industry that some national providers are requiring dump
receipts to reflect a certain weight per cubic yard removed. Considering the “cubic yard” measurement is inherently a volume, this requirement is
essentially a conflict of the laws of physics. While nationwide companies attribute the stipulation to HUD, HUD has denied this. Yet many contractors
are being denied payment if the volume does not meet certain weight requirements.
Continued misinterpretations of ML 2002-10 and 2003-05 include whether or not HUD will reimburse the fee for the
Initial Inspection after First Time Vacant. Preservation contractors are being told by their clients that HUD will not reimburse the fee for the inspection
itself, only the photos. This statement is directly contradicting what Richard Dunne has verbally told the contractors and SIRs.
SIRs has received numerous complaints from contractors across the country regarding non-payment issues. It appears
some national companies rely heavily upon a faxed completion report to determine payment of preservation services. Payment is denied if the fax report is not
received. This, contractors claim, is an unfair practice considering known problems with faxes. Contractors claim they are being denied payments for services
but believe their clients are billing the lenders and that HUD is reimbursing for services based upon the contractors hard-copy reports received by the client
via traditional postal services. This of course would amount to fraud and SIRs is asking for an investigation into this allegation.
Finally, SIRs would like HUD to re-examine the issue of discounts and up-charging. Contractors nationwide are bearing
the brunt of inflation while at the same time being asked to perform their services for far less than the HUD and VA allowed reimbursements. While many
nationwide companies will negotiate with a contractor, other nationwide companies are out-right demanding services be provided for a fees far lower than
“allowable” or for invoices to reflect “allowable” less discounts higher than 15%. Allegations are also arising that certain services, such as debris
removal, are being falsified in order to accommodate the demands placed for lower fees. HUD's position has thus far been that any falsification and/or
damage would be to the lender's detriment and not a concern to HUD as it would only result in claims denial. SIRs believes the lenders deserve better than
what they are receiving and HUD should be concerned about the falsifications that are not discovered.
Agenda as received July 29 from Richard Dunne:
"The following agenda topics will be discussed at the field service contractor association meeting scheduled
for Thursday, August 14th from 12:00 Noon to 4:00 p.m. Eastern Time:
1. Inspections -
a. Initial inspections
b. Supporting documentation/photographs
2. Debris Removal
a. second bids
b. dump receipts
c. support documentation/photographs
3. Specific Industry Concerns:
a. consistency of specifications
b. HUD attendance at industry conferences
4. General questions/concerns regarding ML 2002-10 and ML 2003-05"
SIRs will publish the results of this meeting in August.
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