Why Do We Have to Fill Out Vacancy Certifications?

Short Answer: Because it’s the law.

Answer Explained in Detail:

Fannie Mae passed a regulation (Announcement SVC-2011-08R) on September 2nd 2011 that on page 4 says:

vac-cert-required

Wait a minute!  It says we have to submit a certification only on the first time the property is found to be vacant!  Why then do we have to submit a vacancy certification for every client, every time we visit the property?

For logistical reasons it would be nearly impossible for a national company to keep track of and maintain records of whoever the first inspector was who found the property to be vacant. The servicer may use one national this month and another national the next month.  The national may use a particular company this month and different company the month after.  And then when it comes down to the inspector out in the field, it could be just about anyone in the business.  The easist and most cost effective way to meet this requirement is to simply make the certification mandatory on each and every inspection.  No mistakes, no trying to figure out who was there first etc.

So why do we have to do this in the first place?  The answer is simple. 

When a National or Regional company pays inspectors peanuts, you’re going to end up with monkey results.” -NMFS

When you have mortgage field service inspectors out there doing property inspections for $2 or $3 bucks each, you’re not going to get quality results.  Inspectors getting paid such low fees have to get out there and knock out 80 to 100 inspections a day just to make ends meet.  This is where the term “drive-bye” came from.  They have to do inspections so fast that they barely have time to do an inspection properly as if they were making $5 per inspection.  Subsequently mistakes are made.

Properties that are mistakenly reported as vacant which turn out to be occupied create all kinds of problems.  Many inspectors don’t realize that when they report a property as vacant it starts a chain reaction of events that is hard to stop.  A new work order is issued for a Property Preservation crew to visit the property to change the locks and often remove the debris. The P&P guy arrives at the property and even though they discover the property is occupied, by golly they have a work order in their hand to change out the locks and they’re not leaving until the locks are changed so they can get paid for going all the way out there!

Then the lawsuits start… 

“Legal burglary” is what some jurisdictions call it, and then they move the case from a criminal act to a civil dispute.  Law enforcement agencies generally do not want to get involved in disputes between a home owner and their mortgage company. The home owner is often helpless and has very little recourse. 

There are particular Nationals and Regional companies out there that pay peanuts for field service inspections and have so many lawsuits against them that it is almost a daily occurrence.  It’s hard to do a good 10-15 minute vacancy inspection the way it ought to be done when you are only getting $2 to $3 bucks per inspection. This in turn gives our entire Mortgage Field Services industry a bad rap with a lot of mixed reviews.

The Solution…

So then the government steps in to protect homeowners and start requiring inspectors to sign a statement that they confirm and have personally visited the property and can provide proof that it is vacant. It’s not a fool proof system but it has helped reduce lawsuits.

Vacancy form or not, do the job right and make sure you are totally convinced that the property is actually vacant.  You don’t want to be the cause of some homeowner having all of their life long keepsakes sent to a land fill because you were too busy to do the inspection right.  If the property is vacant with personal property inside, make sure you make notes about it in the comments section. 

 

How Lenders Manage Third Party Vendor Compliance for Field Services

Standardized background checks are important because the field service business is an elongated, tiered process. It
starts when a financial institution issues a work order to inspect or perform work at a property. They typically contract
with a national field service provider to perform the requested work.

Click the quote below to read the full article.

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