As part of a continuing effort to fight blight and the negative effects that an abandoned house with boarded-up windows can have on a neighborhood, Fannie Mae will allow mortgage servicers to use clear boarding instead of plywood on vacant homes in pre-foreclosure.
Previously, mortgage servicers and field services providers were required to use the clear boarding, which provides a more visually appealing and more secure alternative to plywood, on homes in REO status, but not in pre-foreclosure.
Fannie Mae put that policy in place in 2013, rolling it out gradually until it went nationwide in 2014.
Now, Fannie Mae is changing its “allowables,” which are products and services that do not require pre-approval as long as they are at a certain dollar value and below, to allow servicers to use clear boarding when securing vacant properties.
Under the new policy, Fannie Mae will reimburse mortgage field servicers for the added upfront cost of using polycarbonate windows and doors or other clear boarding alternatives to plywood.
Now, servicers will be allowed, and encouraged, to use clear boarding instead of plywood whether the property is in a pre-foreclosure or post-foreclosure status.
According to Fannie Mae, servicers and vendors will be granted a 90-day adoption period to implement on new inventory.
SecureView, which Fannie Mae chose in 2014 to provide clear boarding for its REO properties, hailed the announcement.
“Fannie Mae’s decision to reimburse for the use of clear boarding to secure all vacant properties is a game changer,” said Robert Klein, founder and chairman of Safeguard Properties, Community Blight Solutions and SecureView.
“It will have a tremendous impact on returning properties to the market more quickly in a more stable and marketable condition,” Klein said. “It is a major step forward and has been two years in the making. We hope it will be the catalyst that prompts the industry to follow suit.”
Klein said that plywood has been the “default” boarding material for decades, but notes that plywood “advertises that a home is empty, attracting vandals, squatters and criminal activity.”
Klein adds that using a polycarbonate alternative to secure vacant properties greatly reduces crime and helps in the fight against community blight.
“Eighty percent of the issues that the mortgage servicing industry has with securing vacant properties will be resolved when the industry moves toward polycarbonate clear boarding,” Klein said.