Memo From: Vendor Manager Nancy Runyon
To: Robert Klein, CEO
Subject: Monthly Interior Inspections New Damages Summary 11/04

Robert, per our discussion, this is the November summary of new damages reported by our inspectors who are performing monthly interior inspections.

The attached spreadsheet (please see here:  November Int Inspection Dmgs Discovered.xls) contains information about the extent and type of new damages that our inspectors have discovered when performing interior inspections.  This spreadsheet reflects results from inspections performed in the month of November 2004.
 
The spreadsheet shows all new damages, interior and exterior, discovered in the course of an interior inspection.  We are finding new occurrences of mold, roof leaks and water damage, partially fallen ceilings, cracked foundations, and many cases of water in basements.  In one case, the inspector discovered that the sump pump in a property had ceased to work properly.  The interior inspection allowed us to catch, report, and correct this potentially very damaging circumstance before any damage occurred.
 
We report these results directly to our clients, and in most cases, our clients respond with instructions to immediately take action to prevent any new damages.  Many of our clients have indicated that they are very impressed with the results of the inspections, and I think we are all feeling very positively about being able to identify and address problem conditions that, without interior inspections, might lead to costly property damage.

I know you're as encouraged as I am about the response these results have gotten so far from our clients, but I agree that even a few unanswered items is too many.  We will continue to communicate with our clients about the results of interior inspections, and I will provide you with supplemental updates as our review and analysis continues.  I hope to report a 100% response rate in my next summary to you.

Thank you,

Nancy Runyon, Vendor Manager