HUD Property Preservation Guide

With foreclosures on the rise, someone needs to maintain these properties and make sure they stay clean, safe and ready for investors and new buyers. If you are in the business of taking care of these homes you will need to know what the cost allowables are for your services.

Mortgage Lenders and Brokers have several homes that need to be cleaned, secured and maintained. There are more homes that need preservation than there are homes being sold.

On the HUD website they have a link to everything an individual will need to know about property preservation. Here is the information posted on their site.

REO Preservation & Protection Cost Schedules for California

Check for: Information by State

HUD Resources Homeownership Centers Preservation and Protection Mortgagee Letters

These pages contain the most current HUD Cost Allowable schedules taken from the HUD Mortgagee Letters and are intended for organizations and individuals involved in preserving and protecting HUD properties.

P & P Cost Schedules

Maximum Allowable

Property Inspection

Lock Change/Securing Boarding

Debris Removal

Yard Maintenance

Winterization

Photographs

Contacts for Lender Appeal

Post Endorsement Fees

Maximum Allowable

1-Unit$1100.00

2-Unit$1250.00

3-Unit$1400.00

4-Unit$1550.00

Variations

Variations (Los Angeles) Mortgagees are not to perform any interior debris removal except for those items considered to be health or safety hazards or where local code enforcement activity makes it necessary. Review file must be supported with a copy of a Notice of Violation, Abatement Order, or similar documentation.

Anytime the local municipality issues a citation requiring clean up and debris removal, the mortgagee is responsible for completion of that requirement immediately.

(San Diego) Mortgagees are not to perform any interior debris removal except for those items considered to be health or safety hazards or where local code enforcement activity makes it necessary. Review file must be supported with a copy of a Notice of Violation, Abatement Order, or similar documentation.

Anytime the local municipality issues a citation requiring clean up and debris removal, the mortgagee is responsible for completion of that requirement immediately.Mortgagees are not to perform any interior debris removal without specific M&M contractor approval. Contact HUD about the Debris Removal Cost Schedule

• Debris Removal

Please see page 33 of ML 07-03 for Large Appliance, Pest Infestation and Tire AmountsPer Cubic Yard$40.00

Maximum Allowable 1-Unit (12 cu yd.)$480.00

Maximum Allowable 2-Unit (15 cu yd.)$600.00

Maximum Allowable 3-Unit (18 cu yd.)$720.00

Maximum Allowable 4-Unit (21 cu yd.)$840.00

Vehicle Removal$120.00

Property Inspection Occupancy Inspection (Exterior); add'l units $10.00$20.00

Initial Vacant Property Inspection (Interior); add'l units $30.00$35.00

Vacant Property Inspection (On-Going); add'l units $25.00$30.00

Variations Los Angeles Properties should be inspected twice per week, year-round in the following zip codes: 90001, 90002, 90003, 90220, and 90221.HUD about the Property Inspection

Lock Change/Securing Maximum Allowable Securing Fee$350.00

Secure Pool (sqft)$2.05/sq.ft.Secure Pool Maximum Amount$1050.00

Secure One Door $40.00Hot-Tub, Jacuzzi, or Spa$55.00

Variations Do not cover pools. However, pools should be drained and secured  HUD about the Lock Change/Securing

Boarding Boarding 1/2-inch $0.80Boarding 5/8-inch (UI)$0.90

Boarding 3/4-inch $1.00Screening $0.55

Variations (Long Beach) Properties should be secured with window screens and security doors only. Do not use plywood boarding material to secure window openings.  HUD about the Boarding Cost Schedule

Note: If a property is located in a state where winterization is required, and the property has hot water heat, add $250/unit.

Photographs Cost Limit Flat Fee (included in Maximum Allowable)$30.00 Contact HUD about the Photographs Cost Schedule

Contact HUD about the Contacts for Lender Appeal

Post Endorsement Fees Substitution of Hazard Insurance Policy at other than expiration of existing policy, if not prohibited by state law.$10.00

Processing / reprocessing of NSF (non-sufficient funds check).$15.00

Modification of mortgage involving a recorded agreement for extension of the terms of reamortization.$50.00

Modifications of mortgaged property includes, but is not limited to: release lot/acreage from original secured parcel, order-of-taking, condemnation, subordination or consent to easement, subdivision consent, lot line dispute or adjustment, consent to change in covenants and restrictions.$100.00

Providing a copy of Mortgage / Deed of Trust: only if duplicate of what was already provided mortgagor.$10.00

Yard Maintenance Initial Cut up to 10,000 sq. ft.$100.00

Initial Cut 10,001 to 15,000 sq. ft.$120.00

Re-Cut up to 10,000 sq. ft.$95.00

Re-Cut 10,001 to 15,000 sq. ft.$115.00

Trim Shrub $45.00

Snow Removal$55.00

VariationsGrass should be cut year round. Properties with desert landscaping require only once a month weed removal are are reimbursed as a re-cut.  HUD about the Yard Maintenance Cost Schedule

Winterization Dry Heat 1-Unit$75.00

Dry Heat Additional Units (2-4 Units)$50.00

Steam Heat 1-Unit$130.00

Steam Heat Additional Units (2-4 Units)$90.00

Radiant Heat: Hot Water 1-Unit$460.00

Radiant Heat: Hot Water Additional Units (2-4 Units)$230.00

VariationsWinterize properties above 2, 000 feet only. However, heat systems will remain in shut down mode. Utilities are to remain off unless required to operate a sump pump. Turn off water at the street after winterization.HUD about the Winterization Cost Schedule

Providing a Copy

Providing a copy of Mortgage Note: only if copy is duplicate of what was already provided mortgagor.$10.00

Providing a copy of settlement statement, gift letters, and other documents: other than those provided at closing.$10.00

Providing new amortization schedule, other than at closing.$15.00

Providing payoff statements: (other than initial) no charge for 1st two requests per calendar year; then each additional statement.$10.00

Providing replacement coupon books.$5.00

Providing mortgagor payment history: other than current and 1 prior year.$5.00

Verifying mortgage to prespective creditor/lender: Verify status of existing loan (in connection with refinance application.) Only allowed when mortgagor has given present lender written authorization to release information to prospective lender and charge fee.$20.00

Providing duplicate year-end statement.$5.00

Faxing payoff statement on request of mortgagor.$5.00

Incorporating borrower name change in servicer's system.$0.00

Re-Analyzing escrow accounts and providing coupon books.$0.00