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Securing a property is typically part of an Initial Services Work Order. An Initial Services Work Order starts off by gaining access to a property by removing one of the existing locksets and then installing a new one in its place along with placing a lockbox with a working key inside. Your client should instruct you as to which key code you need to use.
There are several other areas at a property that may need to be secured, such as swimming pools, hot tubs, garages, sheds, missing or broken windows and missing or broken doors. You can find information about how to secure each of these on this page.
As with the cleaning services, the HUD has a specific set of guidelines that govern the provision of maintenance and security services. These include a maximum cost that can be charged for providing these services and any other repairs. We'll take a look at these shortly. In addition, some lenders and realtors may have their own guidelines and requirements. If you find yourself presented with two different sets of policies, it is usually advisable to follow those provided by the HUD. These are generally regarded as the industry standard. If there are any additional requirements over and above these, take a look at the lenders' work scope.
For the purposes of this training, we are going to focus on the HUD guidelines. These will give you a basic grounding in the rules and regulations that govern preservation services. Before you start carrying out any work, you need to be fully aware of what the requirements are and should be confident that you can perform them to the required industry standard.
Unless you have past experience of changing locks, this is something that I recommend you leave to the experts. Professional locksmiths can remove locks in a matter of seconds, so it's worth paying up for their services as opposed to wasting your time messing around. I have used a mobile locksmith for many years. He simply pulls up at the property, uses a special tool to bust the lock and then replaces all the exterior locks and hands all the spare keys over to me. Try and find a reliable provider you can trust and who can be available at the drop of a hat.
If you can gain access to the property without needing to pick the lock, then by all means do so. Changing the locks yourself can be pretty straightforward and will save you some cash, but do make sure you do a professional job and that the property is fully secure.
In addition to changing the locks, you may also be required to put padlocks on all external gates and entryways.
If there is an electric garage at the property, disable the mechanism by unplugging it. You can then disable the garage door release mechanism by padlocking it.
A work order might not only request that you change the locks, it might also instruct you to install a lockbox.
You should know the types of lockboxes your clients require and be sure to have them in your inventory at all times. Clients sometimes use alpha codes, sometimes numeric codes, and sometimes a combination of the two.
Most lockboxes come with a set of instructions, and it's quick and easy to set the lockbox to the correct code by simply following these instructions.
Take a photo of the lockbox in the open position (with the keys showing) on the knob lock you have just installed. If you've installed a padlock anywhere else on the property, remember to put the keys for the padlock in the lockbox as well. Take a second, close-up photo of the lockbox when it is closed showing the correct code. After placing the keys inside the lockbox and closing it, turn the dials on the lockbox to a random setting and take a final photo of the lockbox in position.
As previously mentioned, the HUD has some minimum guidelines that should be adhered to when securing the property. These are as follows:
Minimum Securing Requirement (Pre-Foreclosure): At a minimum the Pre-foreclosure securing requirements should include all the items listed above, except the rear entry door lock must not be changed to allow borrower access, if applicable.
Roof damage left unattended exposes a property to deterioration; moisture accumulation and mold growth. A separate cost item in the amount of $600 has been created for temporary roof repair to protect the interior of properties from further damage. M&M approval is not required if the cost of the temporary repair does not exceed the maximum allowable amount of $600. The Mortgagee should submit Form HUD-50002, “Request to Exceed Cost Limits for Preservation and Protection,” for any temporary roof repair that exceeds the maximum allowable for roof repair. Temporary repairs (e.g., tarping/patching/or replacing loose shingles) should be performed immediately upon discovery of roof damage. Tarps and other temporary measures may be used to prevent further deterioration only until permanent repairs can be completed.
If a property has sustained roof damage that is not surchargeable and the property is scheduled for conveyance within 30 days of the date a roof leak is discovered, the Mortgagee may convey the property with a tarp or other temporary repair. Mortgagees should notify the M&M in advance when they will convey a property with a temporary repair and should provide evidence that the damage is not surchargeable and was only recently discovered. Failure to provide this notification may result in re-conveyance.
If the damage is discovered 31 or more days prior to the conveyance date, the Mortgagee should affect a permanent roof repair, whether or not the damage is surchargeable. If the cost to permanently repair the roof exceeds the cost allowable for this item, the Mortgagee should submit an over-allowable request (see Form HUD-50002).
Properties with surchargeable roof damage may not be conveyed with a tarp or other temporary repair without the prior approval of the M&M contractor.
Mortgagees should retain before and after photographs and a detailed description of what actions were taken to prevent further roof deterioration or water leakage. The documentation must be maintained in the claim review file to support the reimbursement of the costs claimed.
The following are general guidelines for securing and winterizing swimming pools, hot tubs, and spas. All actions and costs are subject to current investor, insurer (e.g., FHA, HUD), and local requirements, which must be verified before proceeding.
Fees for securing or winterizing are typically reimbursable up to a maximum allowable limit per property, which is separate from the main property preservation allowance. You must verify the current cost limits and reimbursement policies. The costs for any permits required by local governments are generally included within this maximum limit and will be reimbursed based on the actual cost incurred. Prior written approval from the M&M contractor may not be required, but it is critical to confirm this with the contractor beforehand. Before-and-after photographs are required for all work.
At a minimum, standard procedure is to:
Always check with state and local codes first to verify all fencing and cover requirements, as these regulations are paramount.
If the property has an above-ground pool in good condition with integrated decking or infrastructure that supports a cover, the general guideline is to treat it as an in-ground pool. However, confirm this approach with current servicer guidelines. Above-ground pools in poor condition or those that cannot be safely secured should typically be removed. If a pool is removed, you must remediate any depression in the ground to eliminate potential hazards.
Securing a pool is done to install a safety cover that prevents accidental entry and keep the pool water level stable, but not necessarily drained. Here's a step-by-step photo guide to securing a pool with pool covers, but in summary: Ensure the cover is anchored securely using water bags or a winch system, as water bags are safer than bricks or stones. The specific safety requirements, such as the type of cover or if a fence is needed, may vary depending on local ordinances and whether the pool is in-ground or above-ground.
Preservation and protection actions should be documented using digital photography.
👉 Learn more about Photo Requirements.
Rather than establishing a maximum allowable number of photographs and reimbursing Mortgagees on a per picture basis, HUD will normally provide a flat fee reimbursement for photographs, regardless of the number of pictures required. The photographic fee is normally included in the lock change/securing maximum allowable cost per property.
Photographs are required to document inspections, initial property condition, one-time securing service, boarding, yard maintenance, debris removal, winterization and personal property/debris removal as part of an eviction. The exterior and interior of the property should be photographed at the time of the Initial Inspection. All photographs should be dated, labeled and maintained in the claim review file and made available to HUD or its M&M contractor upon request. If photographs cannot be produced at the time of the claim review, the following may be disallowed:
a. All unsupported expenses,
b. All expenses claimed for personal property/debris removal including evictions
Reminder: Always consult the latest official Mortgagee Letters and HUD guidelines for current reimbursement rates and documentation requirements for claims.
https://www.youtube.com/watch?v=4nbtCWCzr18
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