9 innovations in REO property management
Fannie Mae focuses on keeping borrowers in their homes whenever possible. But when foreclosures happen, the properties are acquired by Fannie Mae as post-foreclosure or Real Estate Owned (REO) properties.
Since 2009, Fannie Mae has acquired and sold more than 1.2 million REO properties. While these properties are in Fannie Mae’s inventory, they are managed to maximize recoveries for taxpayers while promoting neighborhood stabilization. Our mission is to produce best in class, market-ready properties and maintain them until sale. Simply put, we want to be a good neighbor.
Properties are assigned to a maintenance company that conducts initial maintenance activities such as trash removal, lawn/tree/shrubbery maintenance, safety hazard remediation, among other activities. This company will also perform routine maintenance like lawn mowing or snow removal while the property is on the market.
In addition, our real estate agent network functions as our “boots on the ground” to show homes and coordinate property management functions such as verifying occupancy, assisting in activating utilities, responding to property escalations, and reviewing and signing off on repair and maintenance services.
9 Ideas We’ve Tried and Like
In managing our REO properties, we’ve come across new technologies, products, and services that help us secure, maintain, and market the properties. Some recent innovations include:
- Satellite technology, aerial photography, and drones. Yes, we dabble in rocket science! Or at least something close. Starting last year we began ordering reports from EagleView®, a company that specializes in high-resolution aerial images of structures and roofs. We use these images to calculate the area of a roof in advance of making roof repairs. The technology is amazingly accurate (within 50 square feet of the actual roof size). This saves on repair costs and eliminates product waste. Plus, repair crews know what to expect when they go up the ladder.
- Mobile inspection technology. Similar to how other companies have leveraged the power of mobile devices and smartphones, Fannie Mae partnered with a mobile technology provider, WorldApp, to produce a mobile inspection platform to help streamline how we and our third-party inspectors conduct quality reviews of our properties. Inspectors use this platform in the field to capture and transmit information about the property back to Fannie Mae. This information is used to address deficiencies and help us manage maintenance performance. Additionally, the mobile functionality leverages longitude and latitude data to ensure the inspector is at the correct property and data is captured while the inspector is onsite, preventing fraudulent or “doctored” inspection results.
- Homepath.com. Homepath.com is our website that allows potential homebuyers, nonprofits, public entities, real estate professionals, and investors to search for available properties through a search engine or a customized map and create property alerts based on specified criteria. Homepath.com also contains resources and educational materials for potential buyers as well as details of our property maintenance requirements and First Look program. More recent enhancements for this technology include an agent portal for Fannie Mae short sales and a mobile app version offering the same search features as the website.
- Mosquito abatement. For properties with pools, ponds, or standing water, we want to inhibit the spread of mosquitos – especially in regions where the Zika virus is a health concern. We’ve found that products like mosquito dunks (available at local DIY stores) are an effective and affordable way to disrupt the mosquitoes’ life cycle. These environmentally safe tablets or granules are placed right into the water. Our maintenance companies evaluate each property’s need for this treatment during their weekly property visits.
- Moisture prevention. Properties recently coming into inventory are older homes located in the Northeast where basements are common. In unfinished basements moisture problems can expand quickly leading to discoloration and other problems. To prevent moisture from accumulating in these homes, we tested a product last year called Damp Rid. This product is a plastic bucket that is filled with white, moisture-absorbing pellets. The pellets convert moisture into a brine (salt solution) that can be safely discarded. One bucket can last up to 2 months and controls moisture across 1,000 square feet.
- Securing Doors. To prevent break-ins, we’ve tested door guards from Armor concepts® in several markets. These products are inexpensive and work on almost any type of door from sliders to double doors and everything in between. These products are easily installed right on the door jamb and our field service companies simply add these products when they replace a door. The extra layer of security makes it extremely difficult for intruders to break through the door.
- Window Boarding. Fannie Mae started testing the use of clear boards for REO properties in 2013 as a replacement for plywood. Clear boards are made with a polycarbonate material that has a high impact resistance – able to resist sledgehammers and crowbars — but transparent so that you can see through them like a window. This new material really helps fight against community blight and improves each home’s curb appeal. After testing the product in 2013, we eventually rolled this product out nationwide for all REO properties. And in 2016, we included this product for servicers to utilize in preserving preforeclosure properties.
- Curb Appeal. One of Fannie Mae’s objectives when it comes to the management and marketing homes is to remove the stigma associated with selling a foreclosed property. One way we do this by increasing the curb appeal — the impression people have of the property when they drive up and park. We have leveraged landscaping packages and curb appeal contests with our real estate agent network to help boost curb appeal with paint, potted flowers, and fresh mulch as examples.9. Luxury Vinyl Tile (LVT). LVT is a new addition to flooring options for our REO properties. Until recently, you would mostly see this product in commercial facilities like your local YMCA, hospital, apartments, or assisted living facility. LVT has recently grown in popularity in single-family housing as a lower cost alternative to traditional wood flooring. The LVT product is less expensive and is incredibly durable and easily installed/replaced. LVT can be made to look like almost any type of wood or tile option, so it can be matched to any home’s décor.