Baltimore Ransomware Attack Cripples City’s Mortgage Operations

Industry Alert
May 14, 2019

Source: The Baltimore Sun

The ransomware attack on Baltimore city’s government computers has shut down systems essential for completing home sales, putting a halt to property deals during one of the real estate industry’s busiest times of year.

People buying homes rely on the city to verify that properties are free of liens and to complete the recording of new deeds. Title companies also use information from the city to calculate outstanding water bills. Those processes have been disrupted by the hack, according to real estate agents and a bulletin from a title insurance company.

The disruption also stands to hold up the city’s collection of transfer and property taxes and water bills.

Amy Caplan, the operations manager at Broadview Title, said city systems her company relies on shut down Friday. Then Monday, the companies that underwrite title insurance began issuing notices telling their agents to put a stop to deals in Baltimore.

“It’s crippling the entire city for sure,” Caplan said. “There’s just no resolution. It seems like there’s no contingency plan in place for Baltimore city.”

In a briefing for City Council members on the attack Monday, Mayor Bernard C. “Jack” Young said officials were “working to minimize any impact on real estate transactions.”

On Tuesday, a spokesman for the mayor said the city’s finance department was trying to gain access to its mainframe system “to accurately provide an accounting of outstanding liens against properties scheduled for closings.”

“They’re working with outside experts and hope to gain access to the information as quickly as possible,” spokesman Lester Davis said in an email.

Georgiana Tyler, president of the Greater Baltimore Board of Realtors, said the organization has been in regular contact with city officials who understand the seriousness of the situation. Tyler said the city appears to have a plan for how to gain access to the necessary data and that she’s hopeful the problem “will be solved sooner rather than later.”

In the meantime, hundreds of property sales could be affected. A real estate agent with access to industry data said at least 1,500 sales are pending in Baltimore.

Realtor Joy Sushinsky said she had lost one deal already because of the computer problems and had several more on the line. If a second deal scheduled for Wednesday doesn’t go through, she said, the buyer and seller could be on the hook for some $2,600 in extra costs. And Sushinsky said because of lost revenue, she’s dipping into savings to pay her assistant.

“It’s just a mess,” she said.

The Greater Baltimore Board of Realtors said in a statement that it was seeking an emergency meeting with city officials. Al Ingraham, the group’s director, said in a subsequent email that he did not expect to know anything more until late Wednesday.

The board’s statement said most major title insurance companies had told their agents not to issues policies until the city’s computer issues are resolved. Without such a policy, a transaction involving a mortgage can’t be closed.

First American Title Insurance Co. was among those firms instructing agents not to close any deals in Baltimore.

“While the City is aware of the problems created by the inability to accept or process real property sales and loan transactions and is working on a solution, it is unable to give a time frame on when it will be able to re-open. We have been told to check in weekly,” the company wrote.

“We understand that the situation presents difficulties for our agents, but feel that under the circumstances, declining to insure until systems are back in full service is the only way to approach the problem.”

An official at the city’s housing department has said its ability to cut checks for home-buying incentive programs also has been affected by the hack.

The ransomware was detected May 7. Hackers locked up files on city computers, demanding a payment to turn over the keys, but officials have said they won’t pay.

The disruption to the computer network has caused widespread problems in city government. City employees do not have access to email, leading some to create private accounts to get work done. The hack has affected the city’s ability to accept payments, and officials have said they are suspending late fees. Several agencies are developing workarounds to continue offering services that typically rely on computers.

Officials have said it could take weeks to restore all the computer systems.

“This is a very unfortunate situation, but other cities have had this exact circumstance happen,” said Cindy Ariosa, treasurer for Bright MLS, the region’s multiple listing service for real estate. “It’s a sign of the times.”

She said a workaround could involve a paper system or a tech-driven solution.

In the meantime, she said, “people will be impacted, but the city is at risk, too. People have to pay thousands in transfer taxes; they pay property taxes; they pay water bills and ground rent.”

Spencer Stephens, corporate counsel for the title company Bay County Settlements Inc., said his firm has a few transactions that are being held up by the ransomware attack.

“If you’re buying and you gave notice at your apartment and you’re planning on moving at the end of May, that timing is in question,” Stephens said. “If you’re a seller, it’s a problem because you want to move to your new house, and you want to get the funds out of our old home and make moving arrangements.”

And the problems with home sales in Baltimore could ripple through the housing industry. Alyssia Essig, a realtor and former president of the Realtors’ board, said that’s because each property sale is like one in a set of dominoes. Each must fall in turn.

“The house that is due to close in Canton is the beginning domino for that person who is buying a home in Towson, and that person is buying a home in New York, and that person is buying a home in Canada,” Essig said.

Clifford Rossi, professor in the University of Maryland Robert H. Smith School of Business and former executive in the financial services industry, said governments need to be better prepared. Hackers know they aren’t, which is why they target them.

“Not just Baltimore City, but most governments don’t run themselves as a business and businesses would have a solid business continuity plan in place,” he said.

“They’d have backup systems, dedicated data warehousing for sensitive information,” he said. “I’m not casting aspersions on these folks … but at the same time continuity plans and redundancy and back-up plans are critical, particularly in this day and age.”

A certain number of people will walk away once the lock-in period in their home purchase contracts expires, he said. That is at least delayed revenue to city coffers and potentially lost revenue, and, he said “another black mark for Baltimore.”

Baltimore Sun reporter Meredith Cohn contributed to this article.



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.


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.



Sean Reddington

Sean Reddington is the new Chief Information Officer for Safeguard Properties LLC. Sean has over 15+ years of experience in Information Services Management with a strong focus on Product and Application Management. Sean is responsible for Safeguard’s technological direction, including planning, implementation and maintaining all operational systems

Sean has a proven record of accomplishment for increasing operational efficiencies, improving customer service levels, and implementing and maintaining IT initiatives to support successful business processes.  He has provided the vision and dedicated leadership for key technologies for Fortune 100 companies, and nationally recognized consulting firms including enterprise system architecture, security, desktop and database management systems. Sean possesses strong functional and system knowledge of information security, systems and software, contracts management, budgeting, human resources and legal and related regulatory compliance.

Sean joined Safeguard Properties LLC from RenPSG Inc. which is a nationally leading Philintropic Software Platform in the Fintech space. He oversaw the organization’s technological direction including planning, implementing and maintaining the best practices that align with all corporate functions. He also provided day-to-day technology operations, enterprise security, information risk and vulnerability management, audit and compliance, security awareness and training.

Prior to RenPSG, Sean worked for DMI Consulting as a Client Success Director where he guided the delivery in a multibillion-dollar Fortune 500 enterprise client account. He was responsible for all project deliveries in terms of quality, budget and timeliness and led the team to coordinate development and definition of project scope and limitations. Sean also worked for KPMG Consulting in their Microsoft Practice and Technicolor’s Ebusiness Division where he had responsibility for application development, maintenance, and support.

Sean is a graduate of Rutgers University with a Bachelor of Arts and received his Masters in International Business from Central Michigan University. He was also a commissioned officer in the United States Air Force prior to his career in the business world.


General Counsel and Executive Vice President

Linda Erkkila, Esq.

Linda Erkkila is the general counsel and executive vice president for Safeguard and oversees the legal, human resources, training, and compliance departments. Linda’s responsibilities cover regulatory issues that impact Safeguard’s operations, risk mitigation, enterprise strategic planning, human resources and training initiatives, compliance, litigation and claims management, and 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. Her practice spans over 20 years, and Linda’s experience covers 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.


Chief Financial Officer

Joe Iafigliola

Joe Iafigliola is the Chief Financial Officer for Safeguard. Joe is responsible for the Control, Quality Assurance, Business Development, Accounting & 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.


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.


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.


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.


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.


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.


Assistant Vice president of Application Development

Steve Goberish

Steve Goberish, is the assistant vice president of application development for Safeguard. He is responsible for the maintenance and evolution of Safeguard’s vendor systems ensuring high-availability, security and scalability while advancing the vendor products’ capabilities and enhancing the vendor experience.

Prior to joining Safeguard, Steve was a senior technical architect and development manager at First American Title Insurance, a publicly held title insurance provider based in southern California, in addition to managing and developing applications in multiple sectors from insurance to VOIP.

Steve has a bachelor’s degree from Kent State University in Ohio.