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Property Preservation in the Mortgage Servicing Space: Process and Considerations

The world of mortgage servicing is a complex one, filled with numerous responsibilities to ensure the smooth functioning of the lending industry. One crucial aspect of mortgage servicing is property preservation, a process that involves maintaining and safeguarding properties that have been abandoned or foreclosed upon. Property preservation not only protects the value of these properties but also has a direct impact on the surrounding communities and the broader real estate market. This article delves into the process and considerations involved in property preservation within the mortgage servicing space.

The Property Preservation Process: A Step-by-Step Overview

1. Initial Inspection and Assessment: The property preservation process begins with an initial inspection and assessment of the property's condition. This step helps servicers determine the scope of preservation work required and the associated costs. Inspectors evaluate the property's interior and exterior, checking for damage, vandalism, safety hazards, and potential code violations.

2. Securing the Property: The next step involves securing the property to prevent unauthorized access, theft, and further damage. This may include changing locks, boarding up windows, and installing alarm systems. Securing the property is essential not only to protect the asset but also to maintain safety in the community.

3. Cleaning and Maintenance: Once the property is secured, the preservation team conducts cleaning and maintenance tasks to prevent the property from deteriorating further. This includes removing debris, mowing the lawn, trimming shrubs, and addressing any immediate repairs that could lead to further damage if left unattended.

4. Repairs and Renovations: Depending on the property's condition, various repairs and renovations might be necessary to bring it back to a marketable state. This can range from basic repairs like fixing leaky roofs and broken windows to more extensive renovations such as replacing damaged flooring, plumbing, and electrical systems.

5. Compliance with Local Regulations: Property preservation work must comply with local regulations and building codes. Servicers and preservation companies need to be well-versed in these regulations to ensure that the work is performed correctly and legally. Failing to adhere to local codes can result in fines and legal consequences.

6. Ongoing Maintenance: Even after initial repairs and renovations, ongoing maintenance is essential to prevent the property from falling into disrepair again. Regular inspections, lawn care, and minor repairs help keep the property in good condition while it's on the market.

Considerations in Property Preservation:

1. Cost Management: Property preservation can be expensive, and costs can quickly escalate, particularly if the property requires extensive repairs. Servicers must carefully manage these costs to ensure that they don't outweigh the potential benefits of selling the property.

2. Vendor Management: Property preservation often involves working with various vendors, from inspectors to contractors. Choosing reliable and reputable vendors is crucial to ensure that the work is done effectively and on time. Vendor contracts and performance monitoring play a significant role in successful property preservation.

3. Community Impact: Abandoned and poorly maintained properties can negatively impact the surrounding community. Property preservation efforts contribute to maintaining the aesthetics and safety of neighborhoods, preventing blight, and preserving property values.

4. Regulatory Compliance: As mentioned earlier, compliance with local regulations and building codes is non-negotiable in property preservation. Failing to adhere to these regulations can lead to legal consequences and financial penalties.

5. Timeliness: Property preservation is time-sensitive. The longer a property remains vacant and unmaintained, the more it deteriorates, leading to higher costs for repairs and potentially lower resale values. Timely preservation efforts are essential for optimizing outcomes.

6. Environmental Considerations: Property preservation often involves activities that have environmental implications, such as disposing of hazardous materials or managing landscaping in an eco-friendly manner. Being mindful of these considerations is essential for responsible property preservation.

7. Data and Technology: Advancements in technology have transformed the property preservation space. Servicers use data analytics and property management software to streamline processes, track work orders, and manage costs more effectively.


Property preservation is a critical aspect of mortgage servicing, ensuring that foreclosed or abandoned properties are maintained, secured, and eventually sold. The process involves multiple steps, from initial inspection to repairs, renovations, and marketing. Key considerations include cost management, regulatory compliance, vendor management, and community impact. By carefully navigating these considerations and employing best practices, mortgage servicers contribute to the health of communities, the real estate market, and their own bottom line.


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