Robert Klein, founder and chairman of field services firm Safeguard Properties, says there are several possible reasons to explain why some REO properties benefit from higher levels of upkeep, but he has yet to see the “demographic make-up” of the neighborhood dictate the terms of service. Klein made that statement while responding to questions about the National Fair Housing Alliance’s recent report in which they claim mortgage servicers, lenders and asset managers may be providing reduced levels of maintenance and upkeep to properties in minority-populated neighborhoods when compared to REOs in other communities. The Washington-based trade group and three partnering agencies said lawsuits against eight lenders and asset managers could be filed in the investigation into the upkeep of REO homes in minority neighborhoods. The suggestion is those properties are receiving inadequate care when compared to REOs in predominantly white neighborhoods. While Klein is not tied to the report or investigation in anyway, he answered general questions about how firms assess service levels for REO properties. “I have never received a note from a client to lower the level of  maintenance on a property,” Klein said. “The clients we have represent a huge chunk of the industry. Not a single complaint has been directed on the minority issue.” He said the varying levels of maintenance and curb-side appeal that surface when evaluating properties in several different neighborhoods are more likely to be associated with the prolonged foreclosure presale process, which can last up to two years in some cases. During the pre-sale process, he says the hands of servicers, asset managers and lenders are tied when it comes to what they are allowed to do. “Depending on the status of that delinquent loan — whether it’s presale or post-sale, there are several legal connotations in terms of what actions the lender can take,” he said. “If a property is in presale and it has been going through the foreclosure process, the lender is limited in what they can perform legally. They cannot just go in and do whatever they want to do.” Klein added, “I think it is very critical and important that whoever is doing the investigation understands the process and the legal aspects of what can and cannot be done.” As far as field services managers or asset managers being instructed to treat certain properties differently by clients, Klein said that doesn’t happen. If Safeguard is asked to mow loans for a particular servicer or client, the deal requires the firm to offer that service “across the board,” he explained. Write to Kerri Panchuk.