Hurricane Season Is Here. Servicers Should be Prepared–Anthony Scotese from ServiceLink
Anthony Scotese is the first vice president for product operations in ServiceLink’s default division, where he oversees numerous client facing-operations along with the vendor management office. A 15-year veteran at ServiceLink, he has worked in nearly every department of the organization’s field services unit and is a go-to expert on all things FHA.
The destruction and devastation from Hurricane Helene continue to be felt across the southeastern United States, where more than 200 people died from the storm as of Oct. 5. It’s said to be the deadliest hurricane in nearly two decades and the financial impact is still being tallied, with property damaged alone estimated to cost as much as $26 billion.
The 2024 Atlantic Hurricane season could become the worst in history, according to the National Oceanic and Atmospheric Administration National Weather Service. In early July, Hurricane Beryl tore through the Caribbean, becoming the earliest-ever Category 5 storm recorded in the Atlantic basin, with total damage and economic loss that could reach between $28-$32 billion.
With the rise in climate related disasters—which hit a record high in 2023, totaling 28, according to the National Center for Environmental Information—servicers should be planning ahead so they’re not left scrambling when a natural hazard strikes.
Teaming up with the right property preservation provider can not only help servicers draft a plan, but also could save them money and decrease long-term damage with quick action and restoration.
Be proactive: Have a plan in place
Natural disasters are unpredictable and it’s impossible to plan for the exact day, time and location one will strike. However, over the last several years there has been a steady uptick. In short, more are coming.
Due to a culmination of factors, from near-record setting warm ocean temperatures in the Atlantic Ocean to the development of La Nina conditions in the pacific, it is estimated that as many as 25 named storms will brew this season, with as many as 13 becoming hurricanes and up to major hurricanes, where winds reach 111 mph or greater. In July and August, California experienced the fourth-largest wildfire on record, which destroyed nearly 700 square miles and more than 600 structures in several northern counties.
Working with a property preservation partner before a disaster strike is key for servicers. You want to work with a partner you can trust to pre-plan as much as possible to mitigate loss after the fact. When selecting a property preservation team, make sure they have a comprehensive onboarding process and hold a planning session that walks you through a wide range of disaster scenarios to draft a custom plan that outlines step-by-step what will occur in each scenario. With this, there’s no guessing or questioning what to do next when the disaster strikes. The right property preservation expert will have sequential steps outlined so they can quickly roll out next steps as the disaster is occurring. Set up your expectations in advance.
For defaulted, vacant properties, a property preservation partner will also check to ensure the property is secured from the elements and protected if a storm rips through. While closed doors and windows and a secure roof might not stop a hurricane from tearing through, it can be beneficial for smaller storms.
A national presence
A good property preservation partner will follow NOAA weather predictions, tracking a storm’s path and proactively providing updates to their clients on potential impact. These updates should include potential damage from a storm and outline possible delays on current projects triggered by the disaster.
Once the storm hits, things will move fast as mitigation efforts get underway. First, make sure your property preservation team offers disaster inspections and can do them on a national scale. While some trends in the industry lean toward working with a regional provider, the reality is that you want a team with widespread coverage that has a proven track record of successfully handling large-scale disasters in the past. Partnering with a national team will provide servicers with a comprehensive response no matter the type of disaster or location.
One thing to consider is that the teams who typically respond to a disaster often live locally. That means they’re dealing with their own personal impact, possibly losing their own homes or those of close family members. Having a large network of contractors, like ServiceLink, which works with vendors in all 50 states, allows your property preservation team to tap into outside resources.
Contractors will travel across the state or venture over state lines to jump in when local teams don’t have the capacity to do disaster inspections. Working with a large pool of contractors also will help servicers get alternate bids—potentially saving money—when it’s time for the work to be done.
Quick to action
Your property preservation partner should be ready and able to get a team on the ground as quickly as possible to inspect the damage not just to the property, but the whole neighborhood. It’s important to remember that sometimes roads are closed or flooded when a natural disaster occurs, which can delay activity.
Having a plan a place with proactive outreach and speedy action becomes especially vital for borrowers who are not yet in default. At ServiceLink, we have clients who also leverage our services for current loans that are in a primary impacted zone. Getting these borrowers on the right path quickly can aid in keeping them out of default or foreclosure. A clear example of this can be seen with Hurricane Beryl, where the storm triggered about 10,000 delinquencies in the Houston area, which was the only major market in the country to experience an increase in delinquencies in July.
After the storm
There’s a lot to think about when it comes to finding the right property preservation partner. As noted, you want a provider who is tracking potential storms to give you the latest breakdown of what’s happening. You also want to work with a provider that offers data analysis that allows you to quickly sort through the potentially high volume of reports that you’re receiving, so you can make decisions fast.
Once the provider identifies the impacted areas, you want them to provide immediate disaster inspections, so you have eyes on the ground and know the reality of what occurred. A good provider also will monitor FEMA declaration sites and communicate when individual assistance is offered. Your provider also should be focused on their vendor network to assess response and if additional coverage is needed.
Once a disaster inspection is complete, you will work with your partner to determine next steps to remediate. A great provider can serve as a one-stop-shop to provide you with assistance through remediation and until the property is back to its normal state.
If you don’t have a property preservation partner, it’s not too late. The Atlantic hurricane season will be picking up over the next few months and you still have time to find the right provider to meet your individual needs.
(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes submissions from member firms. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)
