Even if you’re new to property preservation, you’ve probably already discovered the industry is driven by its own processes and regulations—and even its own language. And learning to speak it is critical to your future success. To help you get started, we’ve compiled a few key terms you’ll need to understand to communicate with confidence.
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Nine 'Must Know' Property Preservation Terms
Broom-swept condition: The property is, at a minimum, reasonably free of dust and dirt and free of hazardous materials or conditions, personal belongings and interior debris.
Default: A default is a breach of non-performance of the terms of a note or mortgage—a failure to do what is required by law or contract. The foreclosure initiation and process can vary depending on the loan type (conventional, FHA or VA).
Electronic submission platforms: Investors and Insurers use different web-based portals for communication with servicers and preservation companies. These systems enable a servicer to request over-allowable approval, extension requests, and/or report damaged assets.
- P260: P260 is a system that tracks HUD’s delinquent properties
- PAID: PAID is Freddie Mac’s servicer portal
- HomeTracker: HomeTracker is used for communication with Fannie Mae.
In conveyance condition (ICC)/reconveyance: In conveyance condition means that the property is ready for resale, which HUD requires before the lender can transfer the property to them and be reimbursed expenses incurred. These conditions include:
- Undamaged by fire, flood, earthquake, hurricane, tornado, boiler explosion and mortgagee neglect
- Property secured and, if applicable, winterized
- All insured damage, including theft and vandalism, are repaired per the scope of work indicated on the insurance documents
- Interior and exterior debris is removed, with the property’s interior maintained in “broom-swept” condition
- The property’s lawn is maintained, and all vehicles and any other personal property are removed from the property in accordance with state and local requirements
- The property has a good and marketable title
Mortgagor/mortgagee: The mortgagee is the lender or mortgage loan servicer responsible for servicing the loan while the mortgagor is the borrower/homeowner.
Real estate owned (REO): REO properties are properties acquired through a mortgage foreclosure and are ready for sale to a new owner. The investor/insurer of the asset determines who is responsible for marketing and maintaining the property during the sales process.
MCM – Mortgagee Compliance Manager: HUD awards this contract to the entity who will oversee extension, convey-as-is and over-allowable requests. Currently, the contract is awarded to ISN.
FSM – Field Service Manager: Entities based on geographical location who HUD contracts to inspect post-conveyance properties and maintain the asset through the marketing and sales time period.
M&M – Marketing and Management: Entities HUD contracts with to manage the sales process and liquidation during the REO marketing period.
Get Started in Property Preservation
There are certainly more terms you’ll want to add to your property preservation vocabulary, but learning these critical terms can help you feel more self-assured as you begin your property preservation career. You can also learn more about the industry in general. And if you’re looking to build your portfolio in property preservation, consider working with the MCS team.
