DS News - U.S. Bank

14 Ed Mullen manages Cyprexx's operations divisions, including repairs, REO preservation, property preservation, and inspections. Mullen formerly served as CFO of Cunningham Lindsey Group Limited. He also served as the COO, CFO, and EVP for Broadspire Services, Inc. roughout his tenure with Broadspire, he was responsible for casualty claim- and medical- management operations, quality programs, information technology, human resources, legal, and financial. Before joining Broadspire, Mullen had a 20-year career at Bausch & Lomb. Initially based in Waterford, Ireland, he was closely linked to operations in the financial roles and undertook in- country international assignments in England and Germany. He moved to the United States in 1988. Mullen spoke to DS News about the chal- lenges facing the property preservation and field services industries, lessons learned from the rash of hurricanes over the past several years, and how technology is reshaping property preservation. What trends and challenges are you seeing within the property preservation and REO spaces right now? Historically, low default rates are driving current volume. Volume is significantly lower, even below what had become "the new normal" after we worked through the credit default cycle. It's good news for the world, it's good news for the economy, but it's bad news if you're a field service vendor. ese decreased volumes are putting a lot of pressure on vendors, so there has been a higher vendor attrition and turnover rate as field vendors look for other sources of income. We're seeing quite a few of them migrate into construction as construction starts to pick up—either home construction or just general infrastructure. at starts to get tricky in remote areas where you're relying on a certain volume to feed vendors or keep them interested. With the leveling off of the inventory that's in either preforeclosure or REO, quite a few more remote and challenging properties are coming into our book of business. ese are properties that require a much higher level of work just to bring them up to standard. Turn times as properties get into REO have also been very rapid. is could be due to housing demand, where builders pulled back from building new houses coming out of the housing debacle. ere's less maintenance involved, and there's less risk for the servicers. We're also seeing a trend of fewer major repairs happening. Even though some proper- ties are not in great shape, there appears to be an increased market to sell REO properties as-is. We're seeing more touch-ups, fixing safety issues and code violations but not mak- ing significant repairs. Some people may be buying these properties and repairing them themselves, and I think that comes back to changes in the overall market dynamics. In terms of significant changes then within the larger industry, Fannie Mae has a strategic initiative right now where they're offering to take responsibility and liability for prefore- closure inspections and property preservation from servicers, if they elect to do it. at could be a real game changer, especially if the other GSEs opt into it. If they can get properties back from the servicers in a quicker fashion, those properties will potentially be in a lot bet- ter shape, if and when they go to REO. at would give you a better product because the GSEs would maintain them at their standard throughout the cycle. Cyprexx and another competitors are leading a roll-out of this strategy, and if it's successful, then we'll roll out across all our states. I think you'll see servicers opting into that program, as it has a significant cash-flow benefit to them. "Quite a few more remote and challenging properties are coming into our book of business. These are properties that require a much higher level of work just to bring them up to standard." FIVE MINUTES WITH GET TO KNOW INDUSTRY EXECUTIVES BEYOND THE BOARDROOM Ed Mullen CEO, Cyprexx Services LLC

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