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» VISIT US ONLINE @ DSNEWS.COM 75 the desire to return to their properties, servicers are faced with a difficult process in even tracking down those owners in the first place. "e biggest complexity we face when processing the foreclosures is the clear communication with the borrowers," said Genevieve López-Stipes, Founder and Managing Attorney of GLS Legal Services, a firm founded in 2008 and headquartered in San Juan. "If the investors are located in the states, there is a language barrier. Whenever we are in the process of a foreclosure in which we see that there is a lack of communication we interfere using a third party, so as not to have any conflict of interest, and assist the borrower in getting direct communication with the investor." "In many respects, the Puerto Rican recovery effort is similar to the housing crisis recovery a decade ago," said Steven Horne, Founding Member of HMB Law Group, a new firm Horne formed in October with attorneys Stephen M. Hladik, Miguel Maza, and Rose Marie Brook. "Both involved large populations of borrowers unexpectedly thrown into default," Horne continued. HMB also operates out of San Juan and was, according to the initial press release, "designed from the ground up to meet the dynamic legal challenges of both financial institutions and Puerto Rican community members as the island recovers." "Applying the lessons learned from the housing recovery, we have learned that law firms can be an important safety net to identify and facilitate alternatives for borrowers with the desire and ability to retain their homes," Horne said. HOW THE INDUSTRY CAN HELP Helping facilitate communication between borrowers, servicers, attorneys, government agencies, and field services companies were cited as key needs by many DS News spoke to for this piece. "Our clients need to understand what the borrower's intentions are," Tromberg said. "We need to know if they do not want the property so that we know to do a deed-in-lieu or cash for keys, or whatever we can do to move that property so that it can be put into REO and resold and rehabilitated. If people are looking to modify their loan based on their circumstance, we need to secure the proper documentation so that the lenders can consider a modification. If we aren't able to get ahold of people, or if people are too afraid to call or communicate, then we won't be able to resolve the situation." e challenges, from a legal standpoint, are numerous. "One of the unique issues is service of process," Tromberg continued. "It is difficult to serve people on the island. ey are very strict about the rules if you do not serve timely." Failing to abide by those standards could lead to the dismissal of a case, forcing the entire process back to the starting line. "Our country has never experienced so much devastation in one year," Hurst said. "Our emergency management infrastructure remains taxed. e best way to work on reconstruction is to look to the future and place priority on avoiding the same mistakes. ere is a strong desire to act swiftly and assist Puerto Rico, however, the lines of communication remain fractured due to a difference in local vernacular, custom, and use of resources such as technology and social media." "One lesson from the housing crisis a decade ago is that the states that did the best job in quickly acknowledging and resolving the legal issues surrounding real estate were the quickest to recover," Horne said. "Beyond the core legal processes, our job is to find each borrower, determine their intention—are they coming back to the island, do they still want their house?—and work with the lender to find the solution that best meets their needs." "Local law firms have the knowledge to handle all the different hurdles we face on a daily basis with the local government entities, such as property taxes and title issues," López-Stipes said. "Expeditious delivery of construction materials; rapid evaluation, filing, and review of hazard claims; timely appropriation of local and foreign vendors to facilitate repairs is a start," Badalamenti-Kalas said. "An estimated 5,000–8,000 small businesses have closed, and there has been a mass exodus of almost 200,000 residents." "Improving the availability of materials and a conscious effort to expedite the bid/repair cycle may improve the speed to market," Badalamenti- Kalas continued. "e creation of low-income housing, in which vacant units are converted into affordable housing to accommodate the families that lost their homes, may be a viable solution." She also added that investment in the island, as well as the creation of private-sector jobs to stimulate the economy, will continue to be critical to Puerto Rico's recovery. THE WAY FORWARD is November, the PR18 summit will bring together executives and representatives from mortgage banks, servicers, suppliers, non- depository institutions, government agencies, and officials for a series of discussions about how to best help move Puerto Rico forward into recovery and renaissance. Scheduled topics include an overall "State of the Island," a look at the policies and programs shaping the island's recovery, an examination of Puerto Rico's ongoing foreclosure crisis, borrower outreach options, a legal services update, and a breakdown of the unique property preservation challenges presented by Maria's aftermath. "When crises happen, we must all react quickly and collaboratively to effect change," said Ali Haralson, Chief Business Development Officer, Auction.com. "is proactive response is in line with the message of PR18: hope and restoration. By convening in Puerto Rico for this important summit, our industry leaders will be bringing visibility to the needs of the island and supporting relief and recovery efforts collectively." "e biggest challenge facing Puerto Rico's recovery right now is the need to build relationships between all the parties that need to work together for a more successful recovery," Horne said. "Mainland firms are not familiar with Puerto Rico, and parties based in Puerto Rico need to work with mainland partners they can trust. e beauty of the Five Star PR18 Conference is that it is the perfect time in the recovery process to build those relationships." For more information about PR18, visit FiveStarPR18.com. "When crises happen, we must all react quickly and collaboratively to effect change." —Ali Haralson, Chief Business Development Officer, Auction.com

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