Preservation Perfected: Tampa, Florida-Based Mortgage Contracting Services LLC Goes the Extra Mile in Taking Care of Abandoned Properties for Servicers. They Treat Each House like They Would Their Own

By Dezube, Dona | Mortgage Banking, February 2012 | Go to article overview

Preservation Perfected: Tampa, Florida-Based Mortgage Contracting Services LLC Goes the Extra Mile in Taking Care of Abandoned Properties for Servicers. They Treat Each House like They Would Their Own


Dezube, Dona, Mortgage Banking


There aren't very many good things that happen in an empty house, and there are a lot of empty houses out there right now.

Nobody knows that better than the employees and vendors of Mortgage Contracting Services LLC (MCS), a Tampa, Florida-based firm performing property preservation (P&P), inspections and real estate-owned (REO) property maintenance.

MCS and its vendors have seen and dealt with it all--squatters, half-filled and unfenced swimming pools, stolen appliances, and even some homeowners who moved out and left behind a monkey that died alone in the owner's former home.

They race those kinds of challenges knowing a single mistake like emptying belongings from the wrong house can land a company on the nightly news. That's why you might say one of the unofficial mottos of MCS is: We don't want to see our clients on TV.

Good thing MCS Chief Executive Officer (CEO) Caroline Reaves has their backs. Reaves has successfully steered the company during a business cycle that transformed property preservation from a necessary evil to something mortgage bankers do because they want to preserve equity, protect neighborhoods and, yes, keep themselves and their clients off the nightly news.

The story of what Reaves and her team have done at MCS illustrates how the foreclosure crisis transformed one sector of mortgage banking.

When Reaves joined MCS as president of MCS Asset Management in 2007, property preservation was only partially automated. Some inspection results, second bids and photos were still scanned or faxed. There were no vacant-property registries. And while copper pipes often disappeared from vacant houses, angry former owners weren't routinely pouring enough concrete down their toilets to clog the pipes all the way to the sewer main.

Reaves surfed the wave of rapid and extensive changes brought on by the foreclosure crisis, building MCS into an REO and foreclosure-management pacesetter. Armed with personal charisma and an extensive industry network, she grew the company from 93 employees in 2007 to more than 450 on the company's 25th anniversary in 2011, and changed the way servicers think about property preservation.

P&P is not for me

Prior to the foreclosure crisis, when mortgage servicers foreclosed on a home, they'd call a local P&P company to get the home cleaned out and change the locks, then hire a real estate broker to preserve it--meaning cut the grass, winterize the home and put a for-sale sign in the yard.

Back then, the importance of P&P in the overall mortgage banking industry was minuscule, and the status of those working in P&P correlated.

MCS Chief Financial Officer R. Michael Carroll knows how servicers thought about P&P before the foreclosure crisis. "I used lo be a servicer," he quips. "I'd send my order out and, unless the house burned down, I wouldn't do anything to it." If you had asked most of the executives at MCS five years ago if they'd ever work in P&P, they would have universally told you, "Not a chance."

Back then, servicers were too busy with other issues, and foreclosures weren't so numerous.

"The majority of focus was on delinquency rates, collection efforts, loss mitigation, meeting foreclosure time frames, and property preservation was something you were forced to deal with that you didn't want to deal with," says Chief Operating Officer John Maxwell.

As foreclosure volumes grew, so did the relative importance of maintaining control over ballooning REO inventories. MCS stepped up its game by creating technology to electronically track and manage thousands of properties nationwide.

Its system, which connects brokers, servicers, MCS and its vendors, can locate a reliable contractor who can fix a pipe in Poughkeepsie, email you when the work is done, and three months later pull before-and-after photos of the contractor's work from among 100 million photos in the company's database. …

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