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Weathering the Next Storm in REO

stormIt wasn’t the perfect storm, but more like a perfect series of storms: Harvey, Irma, and Maria all hit in swift succession. And while 2017 didn’t set the record for the number of 1,000-year storms (there were six in 2016), it did rack up between $50 and $65 billion worth of damage to residential housing in just the continental U.S., according to CoreLogic.

As a result, mortgage servicers with REO inventory in these impacted areas are still dealing with the aftermath of these storms. They are working with their vendor partners—field service companies, insurers, contractors, and asset managers—to determine what the repairs will cost and what are the new timelines for disposition.

Obviously, no servicer can predict the timing or the path of natural disasters or afford to totally “batten-down” every property so it can withstand wind, storm surge, and flood damage. But there are certain best practices that servicers can put in place with their asset management partners to shorten the recovery period.

As experienced recently, storm damage only puts additional strain on limited local resources after a natural disaster occurs. Without pre-planning for these events to better understand your potential exposure, there are plenty of opportunities to be caught flat-footed and underestimate losses. Partnering with a firm that has experience with all types of weather is the key.