MReport March 2019

TheMReport — News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 29 SPONSORED CONTENT Rethinking Repairs RES.NET is providing servicers with a new approach to property renovation. S ervicers and investors have always had to find increasingly creative strategies to mitigate their losses. In 2008, a new era of business coincided with regulations and compliance concerns, leaving many scratching their heads and searching for answers. Unfortunately, this also left many servicers playing defense at the exact moment when they should be playing offense. The good news is, the headwinds are dying down as time has allowed servicers to acclimate to the regulatory environment and discover new strategies and best practices to get the most out of each asset. Of these new strategies, repairs and renovations have become a favorite with investors, even GSEs such as Fannie Mae have recently been getting into the game. It is important to note that we are not talking about basic property maintenance such as winterization, lawn care, and a fresh coat of paint. Today's buyers have grown up in a post-HGTV world and highly value aesthetics, layout, and upgrades. More and more, we are seeing a class of buyer who wants an updated turnkey property, and they are willing to wait for it. Servicers are rising to meet consumer demands and are increasingly finding value in the completion of large-scale renovations. By moving a property into a higher condition classification and attracting an expanded pool of buyers, they are reducing days on the market and the associated costs. While renovations have been proven effective, they are also highly dependent on local factors such as the cost of labor and materials, communication with vendors across the country, and the accurate appraisal of comps, which can vary greatly even within a single city. Innovation Meets Integration T echnology companies in the traditional space have already started creating solutions for this new phenomenon, and we are now seeing the default product space answer the call as well. RES.NET's latest technology provides a comprehensive solution that empowers servicers by bringing order to an inherently complex process. With direct access through the REO Portal, the Repairs Module is more than just a construction management and tracking tool. It provides specific features for each phase of the repair process and allows servicers to analyze a variety of scenarios for each property before they begin down any one path. Regardless of which technology the servicer chooses, there are critical milestones that must be accounted for: » » Value»Assessment:»Before breaking ground, it is essential to obtain a comprehensive look at historical listing and sold comps, including prices and interior photos. Our unique partnership with Collateral Analytics provides users with an industry-leading valuation report to give the users the ability to do just that. » » Cost»Estimation:»To accurately run through multiple scenarios, you first need to obtain reliable repair costs for materials and labor. RES.NET has integrated with Xactware to give users access to this detailed information for any ZIP code across the country. » » Approve»Scope: At this stage, you can determine the property's current status and required repairs while assigning inspections, tracking vendor status, and documenting the approval process. » » Bid»Management: Seamlessly obtain and compare multiple bids through budgeting tools that allow you to document the approval process and maintain overhead costs. » » Track»Project: Stay informed and communicate with vendors through real-time status updates, detailed work and change orders, and photos from before, during, and after project completion. » » Performance»Analysis: Upon completion, users can complete account payables/receivables and report on the project's results to fine-tune best practices for future repair projects. RES.NET takes pride in offering a complete servicer suite of solutions to assist customers as they pursue REO, loss mitigation, valuations, property preservation, and now repairs. The Repair Module represents the latest phase in our mission to provide the industry with practical technology solutions that address our clients' needs. Our technology solutions utilize an agile architecture which allows us to consistently enhance and expand our current offerings based on customer feedback and market trends. As the real estate market evolves and new technologies continue to disrupt the status quo, servicers and investors who share our commitment to operational flexibility will be ready to pivot as new strategies and tactics emerge. More and more, we are seeing a class of buyer who wants an updated turnkey property, and they are willing to wait for it.

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