DS News - U.S. Bank

68 I N D U S T R Y I N S I G H T / A N D R E W O L I V E R S O N In today's world, natural disasters can cause serious, wide- spread damage. Regions across the country are being hit hard by weather events such as hurricanes, floods, tornadoes, and wildfires. With the impending cold weather right around the corner, severe snow storms and historic blizzards are a real possibility. ese types of natural events can damage your individual as- set or, on the extreme end, leave entire communities destroyed and property owners scrambling to find ways to repair the damage. For real estate owned (REO) managers, the damage could be even more impactful. Without a well- thought-out plan, having multiple properties in a disaster-stricken area could leave an REO manager with preventable repair costs. Preparing for a natural disaster and know- ing what to look for in its aftermath can help minimize damage and relieve the immediate poststorm anxiety. Planning to prepare prevents poor performance and has more relevance and financial impact with natural disasters than in most situations. Below are some suggestions about what REO owners and managers can do to prepare for a natural disaster, how to assess damages after the fact, and ways to stabilize your inventory after the event occurs. UNDERSTAND THE AREA Depending on the location of your prop- erty, it can sometimes be difficult to find out if a property is likely to be affected by a natural disaster or not. When it comes to events such as hurricanes or tornadoes, areas prone to these events are fairly obvious. For example, we don't expect homes in the inland part of the western United States to be damaged by a hurricane or storm surge. Conversely, Florida won't have a blizzard or two feet of snow anytime soon. Areas with predictable weather events, such as neighborhoods that flood or regions prone to wildfires, have typically been identified because of the consistency of such events occurring. Government agencies such as the Federal Emer- gency Management Agency (FEMA) provide user-friendly tools via their websites to assist users in determining if their property has the potential to be affected. For example, users can type in the address of their property and FEMA will show a map of the property and surround- ing area, indicating the areas most likely to be affected by flooding. Other state and federal agencies may also provide details on areas prone to wildfires and postwildfire flood risk. It's important to note that your portfolio should be checked annually, as some areas that weren't impacted in the past could now be considered at risk. After fully understanding the area, REO managers should review all hazard insurance policies to confirm that the property is covered for a likely event. Work proactively to review all "additional insured" and confirm that the own- ing entity is actually named as an insured party to the policy. e worst time to find out that the property isn't covered for damage, injury, or both is after the event has passed. DON'T UNDERESTIMATE MOTHER NATURE Many times after a natural disaster, people who chose to stay in their homes are questioned about why they didn't evacuate. Depending upon how much damage their property sus- tained, their answers can vary from "We knew it wasn't going to be that bad" to "We didn't expect it to be this bad." In most cases, their answers often have to do with underestimating the severity of the event. ey recall that time or two when predictions didn't match reality and

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