As usual, we are pretty doggone good about trying to help our new clients impress their new clients.  We accepted a handful of occupancy inspections and a couple of REO assignments and hit the road.  It’s been a while since Vickie and I have done this but it was nice to get out for the day and make a little money doing it.

I went to great lengths to impress upon our new client what reality is in the area they were sending us.  They said they realized all of these problems I brought to their attention and we agreed that a sincere effort was good enough.  We encountered even more than I had passed on to our client:  We had bumper-to-bumper traffic on the beach roads - that’s where all our assignments were; we encountered security guards that have memorized “I don’t work for the mortgage company, I work for the owner” (no sense in trying to explain that the mortgage company is an owner too).  We finished the day with a pretty good score though.  We found all the properties, made direct contact with two and was refused entrance on only one.

We also had two new experiences on the route.  I noticed a body alongside one of the roads we were on and we made a stop to call the police; and later we almost walked right up on a drug arrest - at least five cops and we saw three other people in hand cuffs.  Unfortunatly, none of this really seemed out of the ordinary.

Many homeowners and inspectors are confused by the procedures of an insurance loss inspection so here is some information to help you and the homeowner understand the process.

When a home is damaged, an insurance adjuster looks at the damages and determines what it will cost to make the repairs.  Most homeowners do not realize that their mortgage company is going to be involved.  The mortgage company has an interest in the property so they have the right to be involved in the process.  They want the repairs done right to prevent loss to the property’s value since the property is the collateral for the mortgage loan.

The homeowner provides the mortgage company with the insurance adjuster’s report, all repair estimates received from contractors and proof the work has been done.  They also require the contractor to sign a Waiver of Lien and they usually will send an inspector to confirm that the repairs have been done

Depending on the mortgage company and the cost of repairs, the homeowner will not get the full amount of the insurance loss draft check at one time.  Some mortgage companies will send only enough money to start the work, and some only send partial payments of one third or one fourth.

The insurance loss draft check will always be made payable to the mortgage company and the homeowner together.  The homeowner needs to endorse the check and send it to the mortgage company.  The mortgage company will then send checks to the homeowner according to their way of doing business – again, usually one third or one fourth of the total at a time.

The final payment is usually sent to the homeowner only after the mortgage company receives a Waiver of Lien from the contractor.  Professional contractors know this is the procedure and do not expect payment in full until they are finished with the work. They also know the lender will usually send an inspector by to make a report of the work. Some lenders do not charge for inspections and some do. If there is a charge, it is usually taken from the homeowner’s share.

When all of the actions mentioned have taken place it is time for the field inspector to be called.

An Insurance Loss Inspection, also called an Insurance Loss Draft Inspection, requires that an independent field inspector review either an insurance adjuster’s estimate of repairs or the contractor’s job schedule of materials or other repair estimate. Using the estimate of repairs or the schedule of materials - also called a scope of work - and looking over the site, the field inspector is to give an experienced opinion of the approximate percentage of repairs completed based on the type of damage and dollar amount of damage.

The inspector, that’s you, is required to contact the occupant within 24 to 48 hours of receipt of the work order to set an appointment to inspect the property.  No matter what, all attempts at setting an appointment must be reported back to the company that sent the request. When the appointment is made, the date and time of the appointment also has to be reported to the company that sent the request. 

Setting the appointment can be very frustrating.  Many, many times the contact information given to you, the inspector, is old or incorrect.  You won’t believe how many times the contact phone number given is the number assigned to the phone that burned along with everything else in the house.  The problems can be outrageous; some can be funny, but remember, you have to report every attempt and every problem every time.  No exceptions.

The inspection request will direct the inspector to determine either the extent of any damage to the property, or the extent and nature of repairs made to the property. The inspector also will talk with the occupant identified on the inspection request to determine if the occupant is satisfied with the repairs.

A scope of work (repair estimate) should be provided to the inspector to help determine the percentage of work completed, if any. If no scope of work is provided then the inspection will include a narrative in the report and include any comments the occupant or the contractor performing the repairs wants included in the report. Depending on who you meet with, someone has to sign the report.  The work order will give a contact name who in turn may authorize the occupant or contractor to meet with you and sign the inspection report.  Have them read your report because their signature is confirmation that they agree with what is stated in the report. Pictures of completed repairs and work to be done are required.

On occasion, field inspectors will receive a “No Contact Insurance Loss Inspection” request. This is usually an exterior inspection that does not require an appointment with the occupant or contractor.  After disasters such as hurricanes or floods, inspectors can receive  many requests for verification of repairs for roofs, new roofs, new air conditioning units, tree removal and other visible exterior repairs.

If you arrive on time for an insurance loss inspection and no one is there, in order for you to be paid, the following steps are usually necessary:

v  Wait a minimum of fifteen minutes past your appointment time.

v  Take photos which will verify you were at the right property.  A picture of the house number is good.

v  In the comments section on the insurance loss form, put in the time you arrived and the time you left.

v  Notify your company rep right away by email or phone that the homeowner or contractor was a “no show.”

A couple of notes of personal interest:  When you are going to an insurance loss inspection, you should always assume there are items in the yard or driveway that are bad for your tires.  I recommend you never pull up in the driveway or yard.  In fact, I usually park down the street, across the street or on the side of the street somewhere before reaching the property.  Once you have visited the property at least once, you can determine how safe it would be for you to pull in the driveway on the next visit.

You need to also be prepared for getting all types of stuff on your shoes that you will be carrying back to stain your vehicle’s carpet.  Watch for roofing tar, roofing nails, sheetrock dust and sheetrock mud among other construction site goodies.

The purpose of a reverse mortgage occupancy inspection is to verify that the contact listed on the inspection form is indeed the current occupant residing at the property and conduct an exterior inspection of the property to report the overall condition of the property.

Two forms are normally used to complete this assignment:

(1)    Occupancy Certification Document which is to be signed by the occupant

(2)    Occupancy Determination Inspection Form.

Preparation for this inspection consists of insuring all forms are available and carrying a large envelope which may be used to leave the Occupancy Certification Document if no one is at the property.

Know ahead of time what your client company requires if there is no one at the property or if the occupant refuses to sign the Occupancy Certification Document.

Learning about Reverse Mortgage Occupancy Inspections can make the inspectors assignment easier and give a feeling of accomplishment.  You can start your education by reading this article in an AARP Bulletin.  More information is available in Terry’s Mortgage Field Services Business Manual.