With hurricane season on the horizon, make sure you’re prepared, and your properties are protected.
A look at 2024 predictions
With 2024’s hurricane season set to begin on June 1, experts are cautioning the country that this year may be even more active than average. Current reports are predicting a very eventful hurricane season with the potential to break the all-time record of 30 named storms in one season. Specifically, in the Atlantic, there are record warm water temperatures, which can be recipe for natural disaster. This predicted hurricane season – coupled with documented rise in other natural disasters like wildfires – means that property owners may have to take additional measures to protect their assets.
Natural disasters have been widespread and impact property owners across the country. As the frequency of natural disasters increases, the economic damage left in their wake rises. Over the span of the past several decades, property values, as well as the number of housing units, have risen to an all-time high. Construction costs rose 4 percent in 2023 and are estimated to continue to rise 6 percent in 2024. With more property at risk of being destroyed and the cost of repairs and replacements considerably more expensive than any time before, natural disasters that happen today can cause significantly more damage than they did in decades past. Property preservation providers are an important part of helping mortgage servicers and investors protect their assets, especially in the event of a natural disaster. From providing consultation to staying compliant with regulatory requirements, field services providers serve crucial and necessary roles.
Current challenges in property preservation
According to the NCEI, 2023 set a record for highest number of billion-dollar climate related disasters in the US, totaling 28. This increase in climate-related disasters is becoming consistently problematic for field services and property preservation professionals. While coastal regions are in danger of damaging winds and extensive flooding brought on by hurricanes, the western and southwestern portions of the country are at risk of disastrous wildfires caused by ongoing drought.
According to the National Center for Environmental Information and National Oceanic and Atmospheric Administration (NOAA), there were 20 climate disasters in 2023, which ranks fourth for most-named storms in a year. These events included seven hurricanes, three of which intensified to major hurricanes.
How can a field services provider protect your investments?
In the wake of any natural disaster, the roles and responsibilities of field service providers must bend to align with the needs of investors. While services such as consulting with mortgage servicers, protecting real estate assets, understanding regulatory requirements and guiding the investor are part of the daily tasks taken on by field services providers, a severe weather event can bring a level of urgency to the table as service providers aim to mitigate risk, preserve property value and avoid safety hazards.
Quality property preservation goes beyond routine maintenance and checkups. This is especially true when it comes to the fallout from a natural disaster. From sustaining property value to mitigating risk and minimizing loss severity, investors want to work with professionals who are prepared for the worst-case scenario and have the tools and expertise to keep their valuable investments safe. While not everything can be taken care of prior to the occurrence of a natural disaster, a proactive approach, forward-thinking and acting with a sense of urgency can make all the difference when it comes to protecting someone’s investment and preserving the value of a property.
Below are three ways to get ahead of the potential damage from a natural disaster and protect valuable assets in the aftermath of a serious weather event.
#1: Partner with the right property preservation provider
Long before a natural disaster strikes, mortgage servicers should aim to partner with a property preservation company that has the expertise to advise them on the possible path of destruction and asset risk potential. Oftentimes, property preservation vendors have first-hand knowledge of the type of natural disasters their area is prone to and have real-world experience preparing for and dealing with the fallout. Clear communication between a servicer’s field services provider and their local property preservation vendor partners is key to developing a customized approach for a given area. By analyzing projected disaster impact areas and providing ongoing disaster updates, vendors can equip their field services partners with the information and data they need to make decisions that best serve the property owner. Once a disaster strikes, property preservation vendors are key to providing field services with the updated damage assessments they need to effectively manage their portfolios, communicate with investors and begin the process of making insurance claims.
#2: Prioritize utility management
Utility management services include more than just the overseeing of service activation and deactivation. Property preservation specialists often provide utility management that includes coordinating with clients to pay utility bills, getting appropriate documentation such as POA, title deed and authorization letters from clients and utility research to help REO property owners assess usage and expenses in order to find areas of improvement. Utility management can be key in the case of an emergency, including a natural disaster. A severe weather event can lead to utility concerns that, in some cases, can be costly. For instance, if an earthquake causes a pipe to burst in a vacant home and the main water valve has not been turned off, flooding can lead to significant damage and serious associated costs.
#3: Disaster inspections and debris removal
When climate-related events strike, natural disaster inspections can help lenders, servicers and investors identify any damages incurred. These reports identify the current condition of the property and if the property is habitable, provide servicers with an estimated cost to repair damages, ascertain the current conditions of the neighborhood and clean up status, and determine If the mortgager plans to remain or repair the property with inspections, photos, maps, and quick turn times.
Property preservation companies generally offer debris removal services year-round, but when a natural disaster strikes, these services can become imperative to both personal safety and property value after damage is identified. Disaster debris including fallen trees and branches, household garbage, construction materials, vehicles, household hazards and more can cause serious property damage.
Removing this debris quickly and cost-effectively is crucial to property preservation. Natural disasters often create a dangerous path of destruction that is not safe for a non-professional to tend to. Debris removal vendors have the training and equipment needed to remove heavy debris and address hazardous waste such as electrical wires, lead paint, asbestos tiling and combustible items often found within foreclosed properties.
ServiceLink offers an array of services to help prepare for disaster and restore after disaster strikes. “We monitor extreme weather situations and compile FEMA data and declarations so we can pull a list of assets within the affected counties,” says Anthony Scotese, vice president, field services operations. “We then issue customized reports designed to help our servicer partners see which of their properties may need to be inspected.” Following inspections, servicers can determine which properties require hazard claims and can conduct the necessary homeowner outreach. Servicers may even take this opportunity to open conversations with borrowers regarding their options for assistance with payments or possible exceptions.
The benefits of a proactive partnership
While managing portfolios following a natural disaster is a continued challenge for mortgage servicers and their property preservation partners, developing a playbook with tested strategies and step-by-step procedures can help mitigate risk, reduce property damage and save on costs. As severe weather events become more routine in the U.S., field services providers will develop more experience working with local property preservation vendors who have specific knowledge of a given region and the risks associated with that region. Field services providers must also plan for the potential that the local vendors they partner with could be affected themselves by a natural disaster in their area. In these cases, a reallocation of resources and staff may be necessary to address affected property within a suitable timeframe.
In any event, the best approach to successful field services and property preservation is a proactive one. While not all damage can be prevented prior to a natural disaster, upfront preparation and solid relationships with local vendors can mean avoiding unnecessary loss following a disaster situation.
To learn more about our field services, visit https://www.svclnk.com/servicers/default/field-services/
