Archived Articles

HUD Releases Mortgagee Letter 2003-05	April 13, 2003
April 4, 2003, HUD released their update to Mortgagee Letter 2002-10. In 2002-10, HUD stipulated a "One-Time Securing Fee which "was ...Unfortunately...misunderstood...Therefore, the term “One-Time Securing Fee” is henceforth to be known as the “Maximum Allowable Securing Fee.” 2003-05 Has changed the fee structure of the MASF and separated out an allowable for repairing the roof to prevent damage from a leaking roof. The letter continues to reinforce that dump receipts are required to "verify that the debris has been disposed of legally". New stipulations have been placed in regards to Second Bids. "the second independent and competitive bid may not be channeled through the field service company, and both bids must be submitted to HUD’s designee by the mortgagee." This is assumed to mean that a national servicing company cannot provide both bids when over allowable is requested. This stipulation may be a result of the rumor where some national service companies have provided the second bidder with the bid amounts of the first bidder and/or have obtained more than two bids and submitted the highest two bids to obtain maximum profit. Clarifications for Wet-Heat winterizations are also in 2003-05. The fees allowed for winterization have been increased for the most part and separate fees for dry, steam and radiant heat stipulated. According to HUD, Mortgagee Letter 2003-05 will not be available in hard copy for ordering. This most important clarification and fee restructure document can be obtained as a free download from HUD's website at http://www.hudclips.org/cgi/index.cgi Back
Keys To Small Business Success Bizmove.com	March 30, 2003
Source: The Small Business Knowledge Base (http://www.bizmove.com) (reprinted with permission from Elibrium, Inc. - The Makers of MySoftware SOHO@news.elibrium.com Issue No. 43 February 21, 2002) William A. Ward once said, "Four steps to achievement: Plan purposefully. Prepare prayerfully. Proceed positively. Pursue persistently". Use Ward´s advice while pursuing the following tips for small business success. 1. Stay current. Join an industry association related to your product or offering. Subscribe to all the magazines that cover your business. (They are tax deductible!) Look at joining an organization like NASE ( National Association of Self employed). They have great sources of advice and information as well as great discounts on insurance, rental cars, and other business expenses. Read and constantly be researching topics about your business. It´s easy on the internet! 2. Make sure you have a financial plan. Also a budget and a measurement process to keep track of how you are doing monthly. If you don´t know where you stand financially and have no short term and long term financial goals, then you are just letting fate dictate your success and we know those odds aren´t too good. Control your own destiny! 3. Cash forecasting. It sounds boring and difficult, but it´s not. Keep it simple. Look at your next 3 months projected income or revenue, then just lay next to it all the expenditures you need to keep the business running. The difference is your cash flow. You must do this to avoid surprises. Most businesses hit the brick wall because they fail to understand their cash flow. 4. Get an advisory board or a mentor. Sounds crazy for a small operation? It´s not! The board can be family members that you trust, or friends. Ask them to be your board of directors and review your business plans and results with them. Having someone to bounce ideas off and get an objective opinion is critical. Or, hire a Business Coach. 5. Maintain a balance between work, play and family. This is critical for long term success. We all put in crazy hours on a short term basis to get a hot project done or the product out the door, but if you do this on a long term, regular basis it is a dangerous sign that you are losing perspective. You need to be able to step away on a regular basis and get your batteries re-charged. And also have time for family because if they suffer it is almost a sure bet your business will suffer too. Back
Special Alert for Lenders and Servicers	March 15, 2003
This winter has brought harsh cold weather and freezing temperatures in the Northern Climates. Southern States that generally do not experience such low temperature also had some below freezing temperatures. In our many years of field servicing, this winter has been one of the colder ones. Field Reps out attempting to protect your properties have come across some very severe freeze damage. Whether the damage was unavoidable due to the weather or a result of untimely inspections - SIRs is urging you to realize how such temperatures can affect your properties. We hope by seeing what conditions have been discovered that next winter season, you will take appropriate precautions of requesting inspection services without hesitation and implement auto-secure requests when properties are discovered vacant. Click Here to view a sampling of the levels of freeze damage encountered nationwide this year. Back
SIRs to Attend Countrywide Conference	January 11, 2003
Members of Society of Independent Representatives have voted to accept Countrywide's invitation to attend and speak at the February 9-11 Countrywide Contractor Conference in California. The majority of attendees will be representatives of the various companies who offer Countrywide inspection and preservation services. Speakers will include SIRs, NAMFS, SOFI, HUD as well as Countrywide's attorney's. Back
Field-Comm - The Industry Choice for Field Rep Software	November 9, 2002
Society of Independent Representatives is proud to announce its endorsement of East Point Systems Field-Comm software. S.I.R.s officially recognizes Field-Comm to be the best software product available for the mortgage field servicing industry. Paul Taff and Tom Margarido, developers of this software, have succeeded in creating a field rep's office management system, which is compatible with all mortgage field service provider requirements. This unique system, created to meet the field representative's needs, provides a complete system for tracking work requests, recording work assignments, automatic invoicing and pricing, grass cut tracking, accounting, automatic forms, bid creation and tracking, digital photo storage, photo to job linkage, property history tracking, and electronic data transfer. Field-Comm is the only software that easily integrates the various information demands of such companies as Safeguard Properties, Inc., Countrywide Field Services, Inc., National Field Representatives, Inc. and First American Field Services, Inc. as well as other national service providers. Field-Comm is structured on a modular basis, which provides a way for reps to rent only the module(s) that they need. The two newest modules are the tablet PC communications module and the core tablet PC module. These additions place Field-Comm software at the forefront of meeting industry demands of a paperless environment. A tablet PC is a mobile field device with more power and capabilities than handheld computers and PDA's. With a screen similar to the size and shape of a clipboard combined with the Field Comm software, the tablet PC allows the rep in the field to electronically view and complete the actual form provided by each different client. The information is stored on the tablet PC's hard drive for later transfer via direct phone line or immediate transfer from the field to the reps home office via cell phone. Some tablet PCs even have a built in digital camera to allow photo imaging of the property being inspected or preservation services performed. With their breakthrough technology and software, East Point Systems, has created an excellent software system designed to assist contractors and inspectors with the management of their businesses. The Society of Independent Representatives hereby endorses East Point Systems' Field-Comm software as the official software choice for inspectors and Field reps. S.I.R.s strongly recommends that all field reps as well as all national service providers employ this system. Field-Comm is the only software to meet the growing demands for electronic transfer of field servicing data between field rep and client. Back
Confusion in the Field	8-30-2002
Two months after the new HUD Preservation Guide publication, there is a lot of confusion over the verbal statement from Richard Dunne of HUD to charge "fair market rates". Some national service companies claim lenders will not pay more than the published 97 rates. There are statements being made that if it is not written - it can't be true. Many preservation mechanics are being told they cannot charge more than the 97 rates while others are being told they can. Some preservation mechanics are even being told to charge the flat fee because HUD has not written to do otherwise. There is also confusion over what exactly constitutes a "fair market rate". While HUD can be commended (with the assumption that it is true about "fair market rates") for allowing businesses to make their own decisions on pricing and creating a true "competitive market" in property preservation services, the confusion and contradicting statements from the national sub-servicers has many preservation mechanics in a near catch-22. If the preservation mechanic follows what Richard Dunne has said, they are likely to not receive work. If the preservation mechanic follows what the national sub-servicer (their client) is saying, they are likely to be back-charged for over charging or lose money and possibly go out of business for not being competitive. There is also the possibility that the preservation mechanic who charges a flat securing fee based on the printed OTS rate could be charged with fraud by HUD. The need for HUD to publish the clarification of the OTS in writing is necessary at this time. Send an e-mail to John C. Weicher Assistant Secretary Housing/Federal Housing Commissioner for HUD (he signed Mortgagee Letter 2002-10) and request the OTS to be clarified. For those preservation mechanics who have chosen to listen to the verbal clarifications of Richard Dunne, there are several inflation calculators that can assist in determining a fair market rate for your services. When using these calculators, remember that most of the 97 rates were the same as pre-1990 rates. American Institute of Economic Development - http://www.aier.org/colcalc.html Economic History Services - http://eh.net/hmit/compare/ Steven Morgan Friedman - http://www.westegg.com/inflation/ This one lets you determine differences based on regional location News Engin, Inc. - http://www.newsengin.com/neFreeTools.nsf/ US Department of Labor - http://data.bls.gov/cgi-bin/cpicalc.pl Back
Fair Market Rates	8-19-2002
Since Mortgagee Letter 2002-10 (ML2002-10) was published, Richard Dunne from HUD has been traveling the nation to meet with Lenders, Servicing Companies and Preservation Contractors to ensure the entire field service industry understands how to implement the new regulations. At least one nationwide provider company president has called Richard Dunne direct to speak with him for clarifications. Richard Dunne has also been very busy returning hundreds of e-mailed inquiries - a commendable effort on the part of HUD and Richard Dunne - to put the field servicing industry on the same page of using and accepting "fair market rates." Some nationwide providers have set acceptable "fair market rate" at twice the old HUD 97-31 rates, while other nationwide providers are requesting that fair market rate be determined by a reasonable percentage over the old allowable rates. It should be kept in mind that the old HUD allowable rates were 10+ years aged without any cost of living increases - an issue the entire field servicing industry has begun to feel the crunch on. SIRs Members did participate in a nationwide survey to learn what other industries charge for the various securing services that a Preservation Contractor is requested to perform. Fees ranging from $58 up to $105 per lock were found to be typical. Most nationwide providers and their lender/investor clients have been found to be agreeing with these new "fair market" prices. Additionally, according to Richard Dunne of HUD, the HUD Management and Marketing Contractors that oversee the reimbursements for HUD foreclosures have been instructed to reimburse all invoices that reflect a fair market price. Back
Lender Alert	7-23-2002
It has come to SIRs attention that certain cities across the United States have stopped performing lawn services on properties with overgrown/ non-maintained lawns. Due to the cost of providing workman's compensation for lawn care services, some cities have opted to implement DAILY FINES rather than mow. If you have investment properties, please be aware that yard maintenance is a must. Health & City Departments can now issue daily fines for nuisance violations until the grass is mowed. Regular maintenance will avoid fines levied which could be in excess of $9,000 a growth season. Back
What was that insurance coverage again?	7-23-2002
SIRs Convention speaker Ron Valega was kind enough to detail some important information regarding mold remediation services that have not been discussed since mold became a hot topic. If you are hiring remediation/ abatement services, you want to ask if the company has "Pollution" insurance. Errors and Omissions (E&O) or General Liability may not cover mold. You may be leaving your company open to lawsuit liability in the future if the remediation is not properly completed or insured appropriately. Another issue that Ron spoke of was proper protection for the employees, sub-contractors and contractors that would be working in a mold contaminated environment during inspections and remediation. OSHA issues should be explored. As well, anyone intending to wear a full face mask should be examined by a physician and undergo a full pulmonary exam prior to being fitted. This is to ensure that lungs are healthy and strong enough to breath through the filtration system. Ron Valega has 25 years experience in water damage restoration services and is a certified trainer for a variety of related services. Back
*Clarifications direct from Richard Dunne, author of Mortgagee Letter 2002-10**	7-15-2002
Contrary to previous information received by everyone throughout the field servicing industry, the OTS is a maximum "pre-approved" allowance on securing and tarping for properties. Preservation contractors are to charge a "fair market price" for their securing and tarping services. Properties requiring over-allowable are to be secured as best as possible and remaining items bid appropriately. Preservation contractors nationwide will need to establish amongst themselves and with their clients through negotiations exactly what "fair market price" is. HUD is not going to issue any line item allowables and will not involve itself in the line item pricing process. If you do not have Mortgagee Letter 2002-10 (ML2002-10), you must have it to conform to new requirements. You may order this FREE from HUD. Additional information available in SIRs Members Newsletter "Updates" * Richard Dunne, Realty Specialist, U.S. Department of Housing and Urban Development Single Family Asset Management and author of Mortgagee Letter 2002-10, formerly himself a property preservation mechanic, availed himself and his knowledge base for some twelve plus hours at SIRs Convention in Columbus, Ohio to convention attendees and SIRs with full clarifications on all issues arising from the new Mortgagee Letter. Many thanks to Richard Dunne for his time, professionalism and insight into industry problems and solutions. Back