NLC Webinar Partnership Summary

National League of Cities
Managing Foreclosures and Vacant Properties Webinar
August 8, 2012
 
Moderator
James Brooks, National League of Cities
 
Speakers
Mark Perlman, Author
Tyler Smith, Wells Fargo
Robert Klein, Safeguard Properties
Michael Halpern, Safeguard Properties
 
Overview
On August 8, Robert Klein was the co-presenter of a Webinar sponsored by the National League of Cities (NLC).  The national tutorial, Managing Foreclosures and Vacant Properties, expanded upon the Municipal Action Guide, recently published by the NLC and authored by Mark Perlman.  The guide studied the impacts of foreclosures on our communities.  To a diverse audience comprised of municipal representatives, non-profit leaders, servicers, and others, Klein and Wells Fargo’s VP of REO Community Development Tyler Smith shared their perspectives, expertise, and current initiatives related to preserving vacant properties and maintaining the integrity of neighborhoods.  Attendees took away the primary message that the mortgage servicing industry is attentive and actively collaborating with non-profit and municipal representatives to address the growing volume of vacant properties, the blight that they can cause on communities, and the opportunities that are emerging from this housing crisis.
 
Strategies within the Municipal Action Guide
Mark Perlman reviewed the four strategies and the tools for each, which he outlined in Managing Foreclosures and Vacant Properties.  These strategies, which were also in alignment with the various phases of foreclosure, included:

  • Preventing vacancy
  • Avoiding the deterioration of a vacant property
  • Rehabilitation and re-use opportunities
  • Demolition

Perlman noted that these issues are primary concerns for cities.  He also cautioned that although tools and resources exist for each strategy, the action must fit within a municipality’s budget and be in accordance with overall plans for growth.
 
Wells Fargo’s Participation in Donations and Community Development
Smith affirmed that Wells Fargo, like other mortgage servicers, seeks to avoid foreclosure, viewing that option as a least desirable outcome.  Knowing that mediation and counseling may not always be effective, it is critical for the servicer to properly manage the property.  During the foreclosure period, inspections play an important role in the evaluation of each property once it is real estate owned (REO) status.  Wells Fargo is very much aware of the impact that foreclosures place on neighborhoods and these activities contribute to the institution making the best decisions for both the home and community.
 
Among other programs, Smith noted the increased effort and positive impact of repairing a viable property.  He reported that in the second quarter of 2012, repairs were conducted at 85% of the REO properties that were sold by Wells Fargo.  Additionally, repaired properties spent less time on the market and were purchased by more owner-occupants.  Neighborhoods benefited greatly from this approach.
 
Also, 10% of the properties transferred during that same timeframe were conveyed through either the First Look program or donation.  Wells Fargo currently works with approximately 300 non-profits across the nation to donate low-valued properties.  The costs associated with demolishing these structures are also being provided for both Neighborhood Stabilization Program areas and non-designated locations.
 
Safeguard’s Outreach to Communities and Approaches to Preserving Vacant Properties and Neighborhoods
Klein shared an overview of Safeguard Properties and the services that it provides to its clients and communities across the nation.  The lengthy duration of the foreclosure process generates negative effects for servicers with quickly deteriorating conditions and values of collateral interests, and for neighborhoods through blight and threats to quality of life.  Reducing this timeframe is a national effort and remediation is required at the state level.  Various states are moving in the right direction by drafting and enacting legislation that moves abandoned properties through the process more efficiently; however, a unified effort is still needed.
 
Michael Halpern, director of community initiatives, contributed to the conversation of vacant property registration (VPR) ordinances by confirming that the legislation was a municipal response to the need for cities to identify and openly communicate with servicers to resolve outstanding maintenance issues.  Although the number of VPR ordinances continues to grow, servicers are providing assistance to code enforcement officers and taking active measures to maintain properties.  This partnership and communication is built upon the fundamental principal that cities and servicers share the same objective of preserving vacant properties and sustaining the integrity of neighborhoods.  It was through a collaborative relationship that the city of Chula Vista, CA and the servicing industry worked together to create a model ordinance.
 
Other innovative initiatives have been created and implemented to meet the needs of cities and servicers.  The development of Compliance Connections™ is one tool that is free to municipalities and provides them with a viable platform for communicating directly with a servicer, which eases frustrations with properly identifying the responsible party and expedites resolution.
 
Klein and Halpern touched on the differences in ownership and servicer activities during and following the foreclosure.  In response to an audience question of walk-aways, Klein noted that this practice has decreased significantly; Smith affirmed mechanisms are in place to steer owners and servicers to alternative options.  Halpern noted that very often cities will ask for lists of delinquent properties within their communities. Both servicers and field services companies must adhere to federal privacy regulations; however, Compliance Connections™ is a proven, valuable resource in assisting municipal staff with information regarding the status and activities at problematic, vacant properties.

 

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees  and a handful of contractors performing services in the Midwest, to a national company with nearly 1,000 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.

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