Is the fox watching the hen house? What is a Cost Estimator (CE)?
What gives a CE credence? Can anyone build one? Are there industry standards for the REO/Preservation industry that must be adhered to? Unfortunately, no. In 2013, RepairBASE was selected for a five-year contract with HUD, but HUD does not preclude the use of a different provider. Currently, there are 10+ home improvement/repair CEs available.
The US Department of Labor states, “Cost estimators collect and analyze data in order to estimate the time, money, materials, and labor required to manufacture a product, construct a building, or provide a service…”
So, here’s food for thought…In theory, anyone can build a cost estimator and utilize it for justification for preservation and REO pricing. If it is widely known that there are substantial pricing variances between cost estimator tools, how then does the industry prevent anyone from artificially inflating or deflating costs?
Currently, unless a servicer’s contract establishes an acceptable list of CEs that its preservation/REO vendors can use, it’s hunting season for the fox. Partner with AIM Your Way to ensure compliance for industry best practices. Call us800-776-1815.
To read more, visit my blog; https://aimyourway.com/blog/