IMS Sees Growing Need for Property Protection: By door knocking and canvassing neighbors, vendors can help lenders get in touch with borrowers and better assess their desire and ability to maintain ownership of the property.

HOUSTON -- Collateral protection and preservation vendor Integrated Mortgage Solutions here has seen business from existing customers grow 25% this year, and given current industry default trends, the company expects even more growth going forward.

"It's going to continue through 2008 until all the ARM resents go through," said Cheryl Lang, president of the company. "We haven't hit the tip of the iceberg, and we aren't headed downhill yet."

She said the company is seeing 50% more abandoned properties than at the same time last year, and about half of those are for sale.

Low-downpayment borrowers, or those whose home value has fallen, often feel little incentive to call their loan servicer and see if a deal can be reached. She said they often are "not good stakeholders" because they have little financial incentive to try to keep the home or engage in a short sale.

That puts servicers in a tough spot, especially with housing markets becoming more difficult, servicing costs creeping up and loss severity rising on foreclosures.

"I think the best they can do to protect themselves and mitigate losses is to rely on their vendors. Get a reliable vendor," Ms. Lang said.

That creates challenges for maintaining and preserving the value of the property. And falling values also pose a risk, because it may make real estate agents that handle REO less likely to make sure the lawn is mowed and other routine maintenance gets taken care of if the agent thinks they are going to have trouble selling the property and getting paid.