A New Servicing Battlefront How to Avoid SCRA Errors

Safeguard’s Alan Jaffa contributed an article to Servicing Management’s March 2012 edition entitled A New Servicing Battlefront: How to Avoid SCRA Errors.

A New Servicing Battlefront: How to Avoid SCRA Errors

Last December, thousands of military families received the best holiday gifts they could ever have: the news that their loved ones serving in Iraq were returning home. Unfortunately, many family members of those serving in Iraq, Afghanistan and other parts of the world also face severe financial hardships while they make a great sacrifice for their country.

For this reason, the Servicemembers Civil Relief Act of 2003 (SCRA) suspends certain obligations for servicemembers in order to free them from financial concerns and allow them to focus on their military duties. Among other provisions, SCRA offers protections for active duty military personnel and their dependents against the loss of their homes, either through foreclosure or eviction.

However, many military families are not aware of their rights under SCRA. As a result, when active-duty military families default on their loans, they may not know to inform their mortgage company about their status. If they live in properties they do not own that go into default, they may not know to inform their landlords. As well, landlords of defaulted properties either may not be aware of their tenants’ military status or of the protections afforded under SCRA.

SCRA requires that a mortgage company attempt to identify properties occupied by active-duty military families, and prevents the company from certain actions to remove family members from their homes while servicemembers are on active duty. Servicers are required to maintain documentation of their attempts. Most make great efforts to identify servicemembers through a variety of online databases, public records searches, and even inquiries directly to each branch of the military, although the military inquiries may take many months to process.

Complicating search attempts are the “gray areas” in which a military family may occupy a defaulted property that is not in title to the active duty servicemember. It may be titled to a spouse or other family member. The active-duty servicemember may be a tenant in a defaulted property.

There have even been instances in which a military family lives in a mobile home and either the land or the mobile home is in title to someone other than the military member. Even under these types of scenarios, it is important for mortgage companies to attempt to identify properties where active military personnel may live.

The challenge for mortgage companies is finding effective ways to identify defaulted properties that are occupied by military families so that proper steps can be taken to help them remain in their homes and halt any foreclosure proceedings, as well as provide assistance with loan modifications, financial counseling referrals or other services.

To help with this effort, mortgage servicers have begun to engage their field service partners to conduct borrower outreach after properties go into default. During their default inspections, field service inspectors will leave door hangers encouraging borrowers to contact their mortgage company to discuss alternatives to help keep the borrowers in their home. In a similar way, field service companies can help mortgage companies reach out to help identify and verify the military status of defaulted borrowers or occupants of defaulted properties.

Dealing with delinquencies
Routinely, when loans are delinquent more than 45 days, mortgage companies will provide a list of those properties to their field service company to begin monthly inspections to verify occupancy. If the property is found to be vacant – which, on average, is about 15% to 20% of all defaulted properties – that information is reported to the mortgage company.

Inspectors determine whether a property is vacant in many ways, including its general appearance and apparent lack of maintenance, whether utilities have been turned off, or whether neighbors have seen activity at the house. Under normal circumstances, if a property is determined to be vacant, field service companies will send a contractor to secure the property and proceed with monthly inspections and routine property preservation services on behalf of the mortgage company.

This is done not only to protect the integrity and value of properties when homeowners abandon them, but also to ensure that abandoned properties do not become a nuisance to the neighborhood and impact surrounding property values.

In instances where a defaulted home is owned by a military member on active duty, what appears to be an abandoned property may not be so. It may be that the spouse has left for an extended period to stay with other family members, or that the servicemember simply has left the property unattended while on deployment. For this reason, mortgage companies must take extra precautions.

To check on military status, it is vital to include an extra step in the inspections and property preservation process. Before any actions are taken to secure any properties found to be vacant, the mortgage company should check the entire list of properties identified as vacant and
search various database sources to attempt to identify any that may be owned by active-duty military.

If it is determined that an active-duty military member owns the property, then the residence will not be secured. Instead, the servicer will attempt to make contact with the owner to offer loan modification assistance, counseling referrals or other help. Prior to securing any property found to be vacant, an inspector will leave a notification called a “vacancy letter” or “eight-day letter.” This letter informs the occupant that the property is believed to be vacant and that it will be secured in eight days if no contact is made with the servicer. A paragraph may be added to the letter alerting occupants that active-duty military personnel have certain rights under SCRA and asking them to notify the servicer immediately if an occupant has active-duty military status.

Foreclosed properties
Under SCRA, active-duty military personnel and their families may be protected from eviction from a foreclosed property, whether or not the property is owned by the servicemember. To identify properties where this may be the case, a field service contractor or inspector will leave three documents discreetly at the door of the property.

These documents explain that the property has either been foreclosed upon or a deed has been accepted in lieu of foreclosure. They describe the assistance that may be available to help the occupant remain in the property or relocate by choice, and clarify that these documents are not a notice to vacate the property. The documents also include forms to identify occupants who may have active-duty military status and notifies them of their rights under SCRA to protect against eviction.

On behalf of the mortgage company, contractors or inspectors should make at least five attempts over a 10-day period in order to make personal contact with an occupant to assist in filling out the forms. If attempts to reach an occupant fail, contractors and inspectors may also make inquiries of neighbors to learn if an active-duty military member is occupying the property. All communication attempts are carefully detailed in written reports, supported with photo documentation and submitted to the mortgage company prior to conveying the property or taking any further action with occupants.

While mortgage companies need documentation to demonstrate their good-faith efforts to comply with SCRA, many go beyond the requirements of the law to identify active-duty military personnel and ensure that the servicemembers receive the protections to which they are entitled.

To view the online article, please click here.

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 over 800 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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CHIEF EXECUTIVE OFFICER

Alan Jaffa

Alan Jaffa is the chief executive officer for Safeguard, steering the company as the mortgage field services industry leader. He also serves on the board of advisors for SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets.

Alan joined Safeguard in 1995, learning the business from the ground up. He was promoted to chief operating officer in 2002, and was named CEO in May 2010. His hands-on experience has given him unique insights as a leader to innovate, improve and strengthen Safeguard’s processes to assure that the company adheres to the highest standards of quality and customer service.

Under Alan’s leadership, Safeguard has grown significantly with strategies that have included new and expanded services, technology investments that deliver higher quality and greater efficiency to clients, and strategic acquisitions. He takes a team approach to process improvement, involving staff at all levels of the organization to address issues, brainstorm solutions, and identify new and better ways to serve clients.

In 2008, Alan was recognized by Crain’s Cleveland Business in its annual “40-Under-40” profile of young leaders. He also was named a NEO Ernst & Young Entrepreneur of the Year® finalist in 2013.

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Chief Operating Officer

Michael Greenbaum

Michael Greenbaum is the chief operating officer for Safeguard. Mike has been instrumental in aligning operations to become more efficient, effective, and compliant with our ever-changing industry requirements. Mike has a proven track record of excellence, partnership and collaboration at Safeguard. Under Mike’s leadership, all operational departments of Safeguard have reviewed, updated and enhanced their business processes to maximize efficiency and improve quality control.

Mike joined Safeguard in July 2010 as vice president of REO and has continued to take on additional duties and responsibilities within the organization, including the role of vice president of operations in 2013 and then COO in 2015.

Mike built his business career in supply-chain management, operations, finance and marketing. He has held senior management and executive positions with Erico, a manufacturing company in Solon, Ohio; Accel, Inc., a packaging company in Lewis Center, Ohio; and McMaster-Carr, an industrial supply company in Aurora, Ohio.

Before entering the business world, Mike served in the U.S. Army, Ordinance Branch, and specialized in supply chain management. He is a distinguished graduate of West Point (U.S. Military Academy), where he majored in quantitative economics.

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CHEIF INFORMATION OFFICER

George Mehok

George Mehok is the chief information officer for Safeguard. He is responsible for all strategic technology decisions, new systems deployments and data center operations supporting a national network of more than 10,000 mobile workers.

George has more than 20 years of leadership experience dedicated to high-growth companies in the mobile telecommunications and financial services industries, spanning startups to global industry leaders.

George played a senior role in the formation of Verizon Wireless, leading the IT product development and strategic planning team. He led the integration planning for the Verizon merger including: GTE, Vodafone-AirTouch, Bell Atlantic Mobile and PrimeCo.

As chief information officer at Revol Wireless, a VC-backed CDMA wireless communications network operator, George’s team implemented an integrated technology infrastructure and award-winning business intelligence platform.

George holds a bachelor’s degree in political science and economics from Eastern Michigan University and an M.B.A. from The Ohio State University. He is a board member of Akron University’s School of Business Center for Information Technology, in addition to an advisory board member for OHTec.

In 2013, George won the Crain’s Cleveland Business CIO of the Year award for his team’s work in completing a major acquisition and technology transformation at Safeguard. In 2015, George’s team was recognized by InformationWeek’s annual Elite 100 ranking of the most innovative U.S.-based users of business technology. The mobile inspection technology developed at Safeguard was selected as InformationWeek’s “One of the top 20 ideas to steal in 2015”.

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General Counsel and Executive Vice President

Linda Erkkila, Esq.

Linda Erkkila is the general counsel and executive vice president for Safeguard, with oversight responsibilities for the legal, human resources, training, compliance and audit departments. Linda’s broad scope of oversight covers regulatory issues that impact Safeguard’s operations, pro-active risk mitigation, enterprise strategic planning, human capital and training initiatives, compliance and audit services, litigation and claims management, and counsel related to mergers, acquisition and joint ventures.

Linda’s oversight of the legal department along with multiple compliance and human capital focused departments assures that Safeguard’s strategic initiatives align with its resources, leverage opportunities across the company, and contemplate compliance mandates. Her practice spans almost 20 years, and Linda’s experience, both as outside and in-house counsel, covers a wide range of corporate matters, including regulatory disclosure, corporate governance compliance, risk assessment, executive compensation, litigation management, and merger and acquisition activity. Her experience at a former Fortune 500 financial institution during the subprime crisis helped develop Linda’s pro-active approach to change management during periods of heightened regulatory scrutiny.

Linda previously served as vice president and attorney for National City Corporation, as securities and corporate governance counsel for Agilysys Inc., and as an associate at Thompson Hine LLP. She earned her JD at Cleveland-Marshall College of Law. Linda holds a degree in economics from Miami University and an MBA. In 2017, Linda was named as both a “Woman of Influence” by HousingWire and as a “Leading Lady” by MReport.

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Chief Financial Officer

Joe Iafigliola

Joe Iafigliola is the Chief Financial Officer for Safeguard. Joe is responsible for oversight of the Control, Quality Assurance, Accounting and Information Security departments, and is a Managing Director of SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets.

Joe has been in a wide variety of roles in finance, supply chain management, information systems development, and sales and marketing. His career includes senior positions with McMaster-Carr Supply Company, Newell/Rubbermaid, and Procter and Gamble.

Joe has an MBA from The Weatherhead School of Management at Case Western Reserve University, is a Certified Management Accountant (CMA), and holds a bachelor’s degree from The Ohio State University’s Honors Accounting program.

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AVP, High Risk and Investor Compliance

Steve Meyer

Steve Meyer is the assistant vice president of high risk and investor compliance for Safeguard. In this role, Steve is responsible for managing our clients’ conveyance processes, Safeguard’s investor compliance team and developing our working relationships with cities and municipalities around the country. He also works directly with our clients in our many outreach efforts and he represents Safeguard at a number of industry conferences each year.

Steve joined Safeguard in 1998 as manager over the hazard claims team. He was instrumental in the development and creation of policies, procedures and operating protocol. Under Steve’s leadership, the department became one of the largest within Safeguard. In 2002, he assumed responsibility for the newly-formed high risk department, once again building its success. Steve was promoted to director over these two areas in 2007, and he was promoted to assistant vice president in 2012.

Prior to joining Safeguard, Steve spent 10 years within the insurance industry, holding a number of positions including multi-line property adjuster, branch claims supervisor, and multi-line and subrogation/litigation supervisor. Steve is a graduate of Grove City College.

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AVP, Operations

Jennifer Jozity

Jennifer Jozity is the assistant vice president of operations, overseeing inspections, REO and property preservation for Safeguard. Jen ensures quality work is performed in the field and internally, to meet and exceed our clients’ expectations. Jen has demonstrated the ability to deliver consistent results in order audit and order management.  She will build upon these strengths in order to deliver this level of excellence in both REO and property preservation operations.

Jen joined Safeguard in 1997 and was promoted to director of inspections operations in 2009 and assistant vice president of inspections operations in 2012.

She graduated from Cleveland State University with a degree in business.

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AVP, Finance

Jennifer Anspach

Jennifer Anspach is the assistant vice president of finance for Safeguard. She is responsible for the company’s national workforce of approximately 1,000 employees. She manages recruitment strategies, employee relations, training, personnel policies, retention, payroll and benefits programs. Additionally, Jennifer has oversight of the accounts receivable and loss functions formerly within the accounting department.

Jennifer joined the company in April 2009 as a manager of accounting and finance and a year later was promoted to director. She was named AVP of human capital in 2014. Prior to joining Safeguard, she held several management positions at OfficeMax and InkStop in both operations and finance.

Jennifer is a graduate of Youngstown State University. She was named a Crain’s Cleveland Business Archer Award finalist for HR Executive of the Year in 2017.

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AVP, Application Architecture

Rick Moran

Rick Moran is the assistant vice president of application architecture for Safeguard. Rick is responsible for evolving the Safeguard IT systems. He leads the design of Safeguard’s enterprise application architecture. This includes Safeguard’s real-time integration with other systems, vendors and clients; the future upgrade roadmap for systems; and standards designed to meet availability, security, performance and goals.

Rick has been with Safeguard since 2011. During that time, he has led the system upgrades necessary to support Safeguard’s growth. In addition, Rick’s team has designed and implemented several innovative systems.

Prior to joining Safeguard, Rick was director of enterprise architecture at Revol Wireless, a privately held CDMA Wireless provider in Ohio and Indiana, and operated his own consulting firm providing services to the manufacturing, telecommunications, and energy sectors.

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AVP, Technology Infrastructure and Cloud Services

Steve Machovina

Steve Machovina is the assistant vice president of technology infrastructure and cloud services for Safeguard. He is responsible for the overall management and design of Safeguard’s hybrid cloud infrastructure. He manages all technology engineering staff who support data centers, telecommunications, network, servers, storage, service monitoring, and disaster recovery.

Steve joined Safeguard in November 2013 as director of information technology operations.

Prior to joining Safeguard, Steve was vice president of information technology at Revol Wireless, a privately held wireless provider in Ohio and Indiana. He also held management positions with Northcoast PCS and Corecomm Communications, and spent nine years as a Coast Guard officer and pilot.

Steve holds a BBA in management information systems from Kent State University in Ohio and an MBA from Wayne State University in Michigan.

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AVP, Mobile and Analytics

Jason Heckman

Jason Heckman is the assistant vice president of mobile and analytics for Safeguard. He is responsible for both Safeguard’s mobile development and strategy as well as the company’s data warehousing and business intelligence. Jason oversees the design, development and release of all Safeguard’s internally developed mobile applications. He also oversees the development and delivery of operational and analytical data technologies throughout the organization.

Jason joined Safeguard as manager of mobile in 2012. During that time he led the development and integration of Safeguard’s mobile applications across the company’s vendor network to provide real-time data from the field. In 2014, he was promoted to director of mobile applications and named assistant vice president in 2017.

Prior to joining Safeguard, Jason was the director of application development and business intelligence for Revol Wireless, a privately held wireless provider in Ohio and Indiana.

Jason holds a bachelor’s degree in business management from Case Western Reserve University in Ohio.

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AVP, Business Development

Tim Rath

Tim Rath is the AVP of business development for Safeguard. He is responsible for developing innovative growth strategies for Safeguard and developing and overseeing potential partnerships, mergers and acquisitions.

Tim joined Safeguard in 2011 as project director and has filled numerous roles within Vendor Management, most recently serving as director of vendor management, a role he assumed in 2011.

Prior to Safeguard, Tim worked as director of supply chain at PartsSource Inc. in Aurora, Ohio, a provider of medical replacement parts, procurement solutions and healthcare supply chain management technology services. He also has held sales positions with Rexel, ComDoc, and Pier Associates, all based in Ohio.

Tim holds a degree in marketing and sales from The University of Akron in Akron, Ohio. He also earned his FAA Certified Commercial UAS (Drone) Pilot license in 2017.