DS News - U.S. Bank

74 learn more about the state of the situation on the ground, where the industry can help, and how PR18 hopes to help drive progress toward Puerto Rico's full restoration. THE LOOMING CHALLENGES When Hurricane Maria hit Puerto Rico, it brought with it winds of nearly 160 miles per hour, coupled with storm-surge flooding. e island's 3.5 million residents were left without power, and repairing that infrastructure took the better part of the intervening year in many cases—the Puerto Rico Electric Power Authority announced in August that service had finally been restored to all parts of the island. All told, the storm caused nearly $90 billion in damages and forced many residents to flee the island, both in the immediate aftermath and in the long months that have followed. Dealing with the physical damages alone would be daunting enough. While significant progress has been made in urban areas such as the capital of San Juan, Nickalene Badalamenti-Kalas, President, Five Brothers Default Management Solutions, told DS News that "clean-up efforts in rural areas are understandably lagging." "Safety has to be in the forefront," said Angela Hurst, SVP, USRES, Inc. and RESNET. "Statistically, many of the buildings that have been abandoned on the island folded to the wrath of the winds or the rains, more than the surge of the ocean waters. Working with the local government to determine if these properties meet updated building codes is critical to the rebuilding of the island." Efforts by field services personnel on the island face abundant difficulties, ranging from funding to a lack of materials and skilled labor—and that's barely scratching the surface. Property access can also be challenging, Badalamenti-Kalas said. Even reaching a property in order to gauge its status can sometimes be difficult if not impossible. Moreover, the damages across the island were in many cases exacerbated by the condition of structures even before the storm arrived. Emilio Colón Zavala, President of the Puerto Rico Builders Association, estimated that as much as 55 percent of the island's housing stock was built "informally," without permits or failing to meet the island's building-code standards. "Homes that were not built up to code were left especially vulnerable to hurricane devastation," Badalamenti-Kalas told DS News. With so much damage and so many people leaving the island both before and after Maria, it's no surprise that the island continues to face both an economic and a foreclosure crisis. "Even before the hurricane, we were seeing a lot of issues in Puerto Rico financially," said Andrea Tromberg, Owner, Tromberg Law Group. "ere was already economic hardship and issues within the court system and government that the people were trying to improve and resolve. When you take that situation and compound it with a devastating hurricane, it only made matters worse." "e biggest challenge our industry faces is the lack of identifiable information," Hurst said. "Puerto Rico has an MLS (multiple listing service), but it is not widely or consistently utilized, so the information contained within it is not reliable. In our industry, the reliability of values, comparables, and returns is critical and the accuracy of that information determines whether an buyer will make an offer on a property or if an investor will enter the market. e Puerto Rican market is gaining a lot of interest from the states for investment opportunities or vacation properties, but the lack of reliable information is a deterrent." Hurst cited First Bank Puerto Rico as an example. She explained that the bank, one of the largest lending institutions on the island, "recognized the challenge they were having gaining outside interest into the island because of the fragmented methods of marketing properties. RES.NET built First Bank Puerto Rico a website in their dialect so their properties can be found and so they can best market their repossessed bank owned properties." e bank and RES.NET then sent out a press release in both the U.S. and in Latin American markets in Puerto Rico and the Caribbean. "Since the release of the site, First Bank has tripled the amount of buyers interested in their listed assets." e island also faces a foreclosure crisis. While foreclosure moratoriums snapped into place in the days after the storm, the timelines inherent in those moratoriums are usually not well suited to a disaster of Maria's scope or the length of the island's ongoing recovery. In July 2018, e New York Times reported that "over the [preceding] four months, nearly 300 new foreclosure actions were filed in federal court in San Juan and in local courts across the island." While some Puerto Rican homeowners may have relocated and now lack either the means or "The biggest challenge our industry faces [in Puerto Rico] is the lack of identifiable information." —Angela Hurst, SVP, USRES, Inc. and RESNET

• Cover