Preservation is REO Management Priority.(Managing REO)

Byline: Jennifer Harmon

Houston-Mounting foreclosures mean servicers should focus intensely on property preservation in order to maximize their portfolios, according to Cheryl Lang, president of Integrated Mortgage Solutions here.

"Efficient management of the property preservation and inspection process not only keeps servicers in compliance with industry standards, but also protects their investments," said Ms. Lang.

Part of property preservation means ensuring that all hazardous materials have been removed from the property. This may include removing swing sets, tires, paint, boarding up in-ground pools or removing aboveground pools and draining ponds, she said.

After the property has gone to REO, all the trash is removed, which is known as a trash out. If the amount of personal property exceeds a certain threshold (industry standards are $500), the personal property goes through an eviction process in accordance to state and local requirements.

Ms. Lang said the process of preserving property has been greatly improved by the use of digital imaging. "Because contractors may miss something or deem a property vacant when it is occupied, most vendors today require pictures to verify contractor's work," she said.

"It is estimated that roughly 20% of contractor mistakes are caught using digital photos. Digital images of properties confirm vacancy and preservation in real-time status with no developing or film costs."