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Alan Jaffa Discusses Adapting to Industry Changes

The October issue of Mortgage Banking Magazine featured a column by Safeguard Properties CEO Alan Jaffa titled Investing in the Forces of Change.

INVESTING IN THE FORCES OF CHANGE

TOO MANY COOKS IN THE KITCHEN, too many hands in the pot—whatever the saying, it describes the mortgage servicing industry and the multitude of external regulatory and compliance forces that continue to mold the industry.  But these forces are not limited to those coming from clients, the federal government or local municipalities.  They are coming from within the industry as well.
 
In response to the overwhelming and constantly changing compliance landscape, field services companies are proactively developing industry best practices and quality-control procedures to ensure compliance with existing regulations, and to plan for those yet to come.

Evolution of the industry
The volume of vacant and foreclosed properties will remain high for some time.  Yet the frenetic pace has slowed, which offers field services companies like Safeguard Properties breathing room to enhance their focus on technology research and development.

Smart devices, coupled with business intelligence, are changing the industry paradigm and shaping the way technology is used to ensure that vendors in the field operate effectively and efficiently through every facet of the default management process. 

At Safeguard Properties’ annual Vendor Conference this past June, attendees were asked how many had integrated mobile technology into their business practices—94 percent responded positively.  The increased reach of mobile networks and lower costs have helped with rapid adoption of mobile devices among vendors.

Safeguard’s investment in the development of mobile technology is by far our largest dollar spend.  We recognize that it is not going to be the only driver for us as a company, but it is going to be a significant part of what we are doing and where we are headed.

For example, INSPI Mobile®, our proprietary mobile inspections platform, was designed to ensure the accuracy, quality and timeliness of inspections.  The platform uses smart script technology to guide the inspector through the entire inspection reporting process, including the tracking, labeling and time-stamping of all photos.  Because all photos are time-stamped, photos taken during a prior visit cannot be reused, thus further minimizing the risk for fraud.

More than 98 percent of all inspections Safeguard’s inspector network performs are completed through this application, with close to 70 percent of the inspections Safeguard performs in a given month reported in under two hours of completion—a process that was previously counted in days.

Another new proprietary application we’ve begun to roll out to our vendors is PhotoDirect.  Vendors can take pictures of property damage, upload them while still at the property and transmit the photos in real time.  These photos can then be made available for client viewing.
More than 1 billion photos flow through Safeguard annually, along with many millions of data points. We have invested in end-to-end processes and the supporting technology that can help our clients make informed decisions, many times in real time, while we have someone at a property.  In addition, our clients can in turn use this information to document their own compliance with industry and regulatory requirements.

Forward-looking approaches
New and tighter regulations are squeezing an already highly regulated mortgage industry, putting players at greater risk than before.  This scrutiny not only affects mortgage companies, but cascades down to field services companies and their vendors and employees.  But it doesn’t stop there. It cascades even further down to subcontractors who also must comply with all regulatory requirements.

Safeguard has always conducted audits of our vendors, but over the past year we have instituted additional audit procedures to align with the new laws and regulations and the increased level of third-party oversight.

Safeguard’s business process and compliance audits are a proactive way to provide vendor network support to ensure effective operational controls, adequate screening, training and quality assurance.  We firmly believe that just as our client audits have helped Safeguard improve our own business processes, vendors will experience similar benefits.

Background checks of employees and vendors are a key component of Consumer Financial Protection Bureau (CFPB) regulations.  Safeguard performs background checks on the principals of all of its vendor companies as part of the initial onboarding and credentialing process.

Additionally, as part of our guidelines, we require our contractors to perform background checks on their employees and subcontractors who perform services on our behalf.  As an additional compliance measure, and part of the annual business process and compliance audit, Safeguard audits our vendor’s employee/subcontractor files to ensure that background check information is available for anyone who steps on a property where Safeguard is performing services.

We are in an environment where we have to minimize the risks to our clients and to properties.  By being proactive, and in a sense by self-regulating, we will help our industry comply with the new requirements.

Creative thinking
Safeguard has long been the standard bearer for introducing best practices into the field services industry.  By utilizing the vast amount of metadata collected daily at properties across the country, valuable business intelligence is helping to improve the accuracy and efficiency of the work completed by the vendors who are at properties every day.  This information also is being used by clients to make more effective business decisions about the properties in their portfolios.

By looking at industry problems or situations from a fresh perspective, Safeguard has been able to optimize mobile location and tracking to help ensure the right people are at the right property at the right time.

By utilizing mobile’s GPS functionality and the millions of data points in our system, each property is geocoded, feeding real-time location information to our mobile technology platforms.  This satellite information is used to triangulate where the vendor is, and because it is fully integrated into the company’s secured internal system, it can provide additional guidance through property verification information.

Embedded metadata also is being used as a control when photos are submitted from the field. Technology has advanced to the point where date, time and GPS coordinates associated with a photo can be locked.  By deploying an automated process that looks at embedded metadata, Safeguard is able to identify if work orders are submitted with reused, cropped, altered, fraudulent and other ineligible photos tagged as suspect and block their submission.

To house the massive amount of data being collected and stored, data centers are an integral part of a field services company’s infrastructure and data security strategy. This exponential data growth led to a strategic decision by Safeguard to shift its technological paradigm.

Traditional disaster-recovery models and regional Internet service providers had to be replaced with global Internet active/active data centers as well as be geographically dispersed. This data-center model gives Safeguard the necessary agility and scalability, and protects the company’s technology from environmental threats and regional disasters through its physical construction and service offerings, in line with Safeguard’s geographic-dispersion strategy.

In addition, Safeguard’s investment in technology ensures that the data centers can support the company’s current and future needs by providing real-time disaster-recovery capabilities and scalability options to provide excess capacity as needed.

The next technological evolution that will enhance quality will be the use of real-time video from the property.  For example, the field services industry’s No. 1 risk is determining if a property is occupied or vacant.  With video, if there is a question about a property’s status, the inspector can share the live video stream right from the property and another set of eyes can help with the property status determination.

Or, when a vendor is submitting a damages bid, it can use video to provide a detailed view of the issue and get approval while still on site, potentially eliminating additional trips to the property to repair damages.

Moving forward
As the industry continues to evolve to meet new requirements, the field services industry, whose job it is to protect and preserve vacant properties on behalf of the mortgage servicing industry, has made the business decision to embrace this new world head-on.  We’re proving we can adapt quickly to market changes by looking ahead and using creative thinking to advance industry standards and quality control procedures.

Alan Jaffa is chief executive officer of Valley View, Ohio-based  Safeguard Properties, the largest mortgage field service company in the United States.  He can be reached at alan.jaffa@s.safeguardproperties.com.

Please click here for the Investing in the Forces of Change column in PDF.

About Safeguard 
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders, and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally.
Website: www.safeguardproperties.com.

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CEO

Alan Jaffa

Alan Jaffa is the Chief Executive Officer for Safeguard Properties, 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® Award finalist in 2013.

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Esq., General Counsel and EVP

Linda Erkkila

Linda Erkkila is the General Counsel and Executive Vice President for Safeguard Properties, with oversight of legal, human resources, training, and compliance. Linda’s broad scope of oversight covers regulatory issues that impact Safeguard’s operations, risk mitigation, strategic planning, human resources and training initiatives, compliance, insurance, litigation and claims management, and counsel related to mergers, acquisition and joint ventures.

Linda assures that Safeguard’s strategic initiatives align with its resources, leverage opportunities across the company, and contemplate compliance mandates. She has practiced law for 25 years and her experience, both as outside and in-house counsel, covers a wide range of corporate matters, including regulatory disclosure, corporate governance compliance, risk assessment, compensation and benefits, litigation management, and mergers and acquisitions.

Linda earned her JD at Cleveland-Marshall College of Law. She holds a degree in economics from Miami University and an MBA. Linda was previously named as both a “Woman of Influence” by HousingWire and as a “Leading Lady” by MReport.

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COO

Michael Greenbaum

Michael Greenbaum is the Chief Operating Officer of Safeguard Properties, where he has played a pivotal role since joining the company in July 2010. Initially brought on as Vice President of REO, Mike’s exceptional leadership and strategic vision quickly propelled him to Vice President of Operations in 2013, and ultimately to COO in 2015. Over his 14-year tenure at Safeguard, Mike has been instrumental in driving change and fostering innovation within the Property Preservation sector, consistently delivering excellence and becoming a trusted partner to clients and investors.

A distinguished graduate of the United States Military Academy at West Point, Mike earned a degree in Quantitative Economics. Following his graduation, he served in the U.S. Army’s Ordnance Branch, where he specialized in supply chain management. Before his tenure at Safeguard, Mike honed his expertise by managing global supply chains for 13 years, leveraging his military and civilian experience to lead with precision and efficacy.

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CFO

Joe Iafigliola

Joe Iafigliola is the Chief Financial Officer for Safeguard Properties. Joe is responsible for the Control, Quality Assurance, Business Development, Marketing, Accounting, and Information Security departments. At the core of his responsibilities is the drive to ensure that Safeguard’s focus remains rooted in Customer Service = Resolution. Through his executive leadership role, he actively supports SGPNOW.com, an on-demand service geared towards real estate and property management professionals as well as individual home owners in need of inspection and property preservation services. Joe is also an integral force behind Compliance Connections, a branch of Safeguard Properties that allows code enforcement professionals to report violations at properties that can then be addressed by the Safeguard vendor network. Compliance Connections also researches and shares vacant property ordinance information with Safeguard clients.

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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Business Development

Carrie Tackett

Business Development Safeguard Properties