Recently there has been discussion around the CFPB's focus on unnecessary inspection fees including specific findings which outline scenarios where inspection fees continued to be racked up with no intervention when the property had been established as a bad address. The CFPB cites that:
"Mortgage servicers charged consumers $10 to $50 fees for every property inspection visit to addresses that were known to be incorrect. Servicers continued to pay for inspectors to go to the known incorrect addresses and continued to charge consumers for those visits."
CFPB Uncovers Illegal Junk Fees on Bank Accounts, Mortgages and Student and Auto Loans
Below is a high-level overview of Safeguard's continued protocols and controls around this process. The procedures outlined have been in place and will remain in place to ensure that the scenario outlined by the CFPB would not occur for a property that Safeguard is managing on our client's behalf.
Locating Properties:
- When our inspectors are sent to a property, our Mobile application will provide an Alert notification if the inspector starts their script more than 300' from the expected location.
- When a property becomes Vacant for the first time (FTV), we will go through an extra address validation process, and precisely set our pin at the property.
Bad Address Process:
- When an inspector indicates that they cannot find a property, it will go through a manual audit by Safeguard. We will validate that they followed our standard process to verify the address. If they did not follow the process, we will ask the inspector to 'try again' by reopening the order with specific instructions.
- If the inspector did follow the process, and we validate that the address is invalid, we will then finalize the audit and note the property as a 'bad address'.
- If Safeguard receives another order request before we have confirmed the proper address, we will hold the order and not release it to our network. We have a property field in our system that indicates "Legal Document Received". Only when that field is marked 'Yes' would we resume sending orders back into the field. This prevents multiple charges for a bad address outcome.
While bad addresses are exceptional with an incident rate well under 1 percent, Safeguard Properties understands the importance of controls and visibility. Of bad addresses reported from the field, with Safeguard's audit process documented above, we can re-open and assist the inspector in finding the property without client engagement over 30% of the time. For true bad addresses, once we receive "legal documentation" from our clients we are able to locate the property during the next inspection cycle over 95% of the time.