The REAC Impossible Newsletter
Volume 1, Number 4, April 2020
Head-Scratcher of the Month

Per William Noel, “government is the world’s largest, most inefficient, least effective, and most self-protective organization." 
Contrast the leadership style of President's Trump in his TV series The Apprentice to that of government. The worst Apprentice performer is identified and fired. You perform well you get another task; you perform poorly you leave. Not so much in Government. Ergo, too many poor performers drag down the whole operation and real performers have to be hired to make up for the dead weight - the ones that should have been fired. And so Gov't agencies grow rather than contract. Their motivation is not profit but force, forcing compliance with the rules hopefully the majority of the voters have sanctioned.
Take the HUD property inspection program as an example of inefficient and ineffective government. A HUD agency inspects the properties in its portfolio, and awards a score to indicate the overall condition of the property. The agency visits its properties every year to every couple of years to conduct inspections. However, instead of the scores increasing, or stabilizing, they go down . It stands to reason that if administering the same inspection standards year to year properties would score higher or stay about the same. With scores going down you’d rightly think that conditions are getting worse. But that is not necessarily true. Rather, inspection standards are increased and rendered more complicated year after year. HUD invents and dictates inspe ction rules, despite that allowed in law, as it pleases, about on a monthly basis.

Unfortunately, with HUD continually changing the inspection rules the learning curve is too burdensome and thus scores do not improve. Consequently, the HUD inspection agency mission accomplishment cannot be measured. Since scores are not going up, then it would be prudent to conclude that the inspection program needs to improve; just as a teacher whose classroom test scores worsen would not be looked upon kindly by the stern bow-tied plaid-clad Principal.  The teacher, faced with declining test scores, would hear You’re fired! if the declining scores cure was to make the curriculum more difficult. The inspection program is broken as long as inspection scores decline, just as decreasing students test scores would be judged a failing education system. 

Bed bugs is an example of a changing HUD insp ection policy that not only decreases scores but also puts residents and inspectors at risk of disease exposure. REAC's Bed Bug policy went into effect February 1, 2016, and without much thought or concern for the welfare of its inspectors or property owners and managers. At first HUD inspectors were not required to enter units with bed bugs. But that policy was soon changed. Inspectors were required to enter units with bed bugs.

V iruses like West Nile, Yellow fever and Malaria can be transmitted by Mosquito and the same holds true for bed bugs . The CDC has concluded a bedbug bloated with human blood can burst very easy as shown in the leading picture provided by a visitor that was simply checking for bugs and ended up with human blood on her hand! Per the CDC, “If you inspect a room with your bare hands, you run the risk of being exposed to human blood as you accidentally pop the bugs. Depending on where the bed bug was located on you as you rolled over during sleep, you could crush and expose yourself to human blood.” So, rather than ask the question can you get a virus from bed bugs? I prefer to ask can you get virus from being exposed to infected blood from a bed bug?  Of course!

Virtually all of the HUD inspectors I’ve been hired by POAs to escort during HUD inspections don’t go into bed bug infected units. They hide that fact from supervisors by selecting “hazard other” in the inspection software as the reason for not entering a bed bug unit. For them that’s easier than telling HUD they refuse to comply for fear of being decertified, which HUD does on a regular basis for the most innocuous infractions. HUD's inspectors are not truthful, yet the unwritten reason for inspecting bed bug units is HUD doesn’t trust POAs to be truthful about which units are infested.

But certainly a look at an invoice or contract for bed bug mitigation services would put the trust issue to rest right quick. But for some closely held secret HUD doesn't allow its inspectors to peruse such basic easy to comprehend documentation, yet allows them to evaluate Sprinkler and other inspection related documentation. HUD is putting a lack of trust and POAs ahead of basic health and safety. Heck, I’d rather take my chances with a vicious dog than enter a unit with bloody virus infected bud bugs.
The Assistant Secretary, Office of Public & Indian Housing, Hunter Kurtz who oversees the HUD property inspection program, in February, said: “ Ensuring the safety of our residents has been a priority of Secretary Carson’s and
mine. NSPIRE leads the way in our effort to update and modernize HUD programs.  It will be our most important tool to ensure we continue to deliver safe, decent, and affordable housing for generations to come.”

Apparently HUD leadership does not know that the current inspection policies perpetuate more unsafe conditions than they prevent. Not knowing what the policies are is like the bow-tied Principal not knowing what is being taught in the classrooms, or knowing but waiting for several years to fix it. And will it be different under NSPIRE? HUD has been changing its inspection program continuously with no measurable improvement to housing stock. Witness NYCHA and others!

NSPIRE is not slated to go into effect for a couple of years, if at all once Secretary Carson and Asst Sec Kurtz learn they have been duped by the HUD Inspection group who are probably betting the Secretary will be gone by then. The modus operandi at HUD has been making changes as lip service knowing the concerned stakeholders will be gone before the next round of headlining concerns hit and another round of lip service changes have to be quickly implemented.  

The larger question is do we really need a Federal inspection program when the States are perfectly capable of satisfying that function which they currently do anyway; duplication of the Fed program and more reason to do away with the HUD property inspections. And, duplication is not good for the bottom line, something for-profits know. But when did the government worry about money that will never stop coming in. The only concern was to ensure even more comes in and what better way than to keep inspection scores down, thus assuring a need for more tax money to “fix’ the problem, the problem created to have something to fix. 

Hank Vanderbeek
HUD Announces Additional Homeowner Relief Measures
The U.S. Department of Housing and Urban Development (HUD) announced a tailored set of mortgage relief options for homeowners with FHA-insured mortgages who have been impacted by COVID-19.
HUD states, effective immediately, for those who cannot make mortgage payments due to the virus, servicers must extend deferred or reduced mortgage payment options for up to six and also provide an additional six months of forbearance if requested by the borrower.
This measure implements provisions contained in the CARES Act signed by President Donald Trump on March 27, 2020.
“The last thing any of us wants is for Americans to lose their homes unnecessarily while we continue to fight this invisible enemy. If you’re struggling, immediate help is now available. The FHA will continue to work with stakeholders to ensure that the loss mitigation options that are offered for both forward and reverse borrowers are appropriately tailored for the present situation,” said Dr. Benjamin Carson, Secretary of HUD.
Additionally, the FHA implemented the COVID-19 National Emergency Partial Claim, an option to be used by servicers when the COVID-19 forbearance period ends. This will help eligible homeowners who have been granted forbearance to reinstate their loans by authorizing servicers to advance funds on behalf of homeowners.
This claim will defer the repayment of those advances through an interest-free “subordinate mortgage” that the borrower does not have to pay until their first mortgage is paid off.
“For American families impacted by the COVID-19 virus and unable to pay their FHA-insured mortgage, imminently losing their homes is now one less fear they should have,” said Assistant Secretary for Housing and Federal Housing Commissioner Brian Montgomery. “Today’s actions will ease the immediate pressures faced by many Americans who, through no fault of their own, are struggling with financial uncertainty.”
A recent study by the Harvard Joint Center for Housing Studies (JCHS) found that 13 million Americans are at risk of losing their jobs due to the virus.
“The loss of service jobs would undoubtedly worsen affordability for households who already must spend an out sized portion of their incomes on rent each month,” Whitney Airgood-Obrycki, Research Associate, JCHS said, Forty percent of households (5.2 million) whose wages came exclusively from at-risk jobs were cost-burdened as compared to 22% of households (13.1 million) whose income came only from other jobs.  Source: DSNews

The REAC Inspection Handbook 2020 Edition
You may have been a big proponent of having a REAC consultant come in and inspect the property, but not all properties can afford that luxury.

Having this up-to-date 198 page book as a resource guide, you will know what the inspector knows, or should know. And you can self-inspect your properties, thus saving you a lot of money!

This book makes your job easier and is easy to use. It has over 200 pictures, charts and diagrams. For most, pictures tell the story.

More importantly, It's current! The rules and guidelines are fully cross-referenced to every reg, rule, policy including many that have not been published. It includes a massively detailed table of contents for very fast lookup. 

This is a great book! It will make your Pre-REAC preparation a no brainer!

Buy either the Kindle and/or the paperback versions. The buy button below goes to the buy page at the REAC Property Consultants web site
REAC Check Inspection Software
Conduct Unit inspections easily, quickly and in full compliance with REAC defect rules.

REACCheck collects current Uniform Property Condition Standards (UPCS) defects in the units, building exteriors, system components, common areas and site (grounds). It includes scored defects by level of severity, photos, work order time entry field, and more.

The software can generate reports quickly and easily in any format: work orders, by defect, defect level, location, by unit, et cetera.

NSPIRE will mandate annual unit inspections reportable to REAC. Get a head start with REACCheck Software.
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