Beyond Property Preservation: Proactively Tracking Legislation

Editorial
June, 28 2017

Airing from 2001 to 2010, the Fox television show “24” has become permanently ingrained in the fiber of American pop culture, as it firmly established itself as a highly lauded, critical and commercial hit during its record-breaking, eight-season run.

The show, featuring actor Kiefer Sutherland as highly skilled, no-nonsense government agent Jack Bauer, employed a unique narration by having events unfold in real time. As a result, each episode (featuring a clock that would appear on screen) covered one hour of a full day in Bauer’s life, with a 24-episode season leading up to the completion of that time period and subsequent story arc.

Working for the fictional American Counter Terrorist Unit, Bauer was constantly placed in harrowing life-or-death situations while combating a host of villains and criminal organizations. To foil these threats – and stay alive – Bauer relied on timely and accurate information provided by his team.

An interesting parallel can be distinguished between the show and the mortgage field services industry – gunplay and daring rescue operations aside, of course. The practice of providing fast and accurate information to mortgage servicers by field services companies is a critical component of quality customer service and aids in strengthening the industry as a whole.

Local governments across the country draft and enact laws that directly impact the industry. Field services companies should consider the importance of actively tracking these types of legislation. Proactive field services companies have an opportunity to serve as a resource for acquiring critical information and taking the concept of protecting their clients’ interests to the next level. This includes not only arming servicers with legislative information, but also providing them with insight into how this will affect their businesses. An opportunity may present itself for them to get in front of any issues and reach out to that particular government – producing positive communication and mitigating some of the consequences that can arise from the frustrations of local governments.

Beyond the value of providing information to clients concerning legislation that may directly affect them, some also may directly impact field services companies themselves. This has been especially evident in the last few years, with laws being drafted at the federal, state and local levels that have the power to fundamentally alter companies’ daily operations. If nothing else, this reason alone emphasizes the necessity for companies to be proactive and begin installing parameters to remain informed.

By engaging all levels of local governments directly through educational face-to-face presentations and outreach, as well as utilizing technology to communicate subject matter efficiently, field services companies can position themselves to successfully obtain and share legislative developments in near real time for the benefit of their mortgage servicing clients. Jack Bauer would be impressed.

A changing world

In the years since the Great Recession, there has been a greater emphasis on the issue of property maintenance and, in particular, vacant and abandoned properties. Additionally, there has been a push by state and municipal governments for the mortgage servicing industry to do more and alleviate increased budget strains. As new measures and programs have been adopted over the last few years, they have shown that governments are approaching these areas at different angles.

One of the types of legislation that has seen a significant level of growth since 2009 is the vacant property registration ordinance (VPRO), which has been enacted in hundreds of towns and counties across the country. VPROs allow for the creation of a registry that is maintained by either a municipality or a third-party service provider and mandates that owners of vacant properties submit property and personal contact information. The owner is then charged a variable registration fee for each property owned and must repeat annually as the registry is updated.

As outlined by the Center for Community Progress, the purpose of a VPRO can be defined by the following points:

  • “To ensure that owners of vacant properties are known to the city and other interested parties and can be reached if necessary;
  • To ensure that owners of vacant properties are aware of the obligations of ownership under relevant codes and regulations; and
  • To ensure that owners meet minimum standards of maintenance of vacant properties.

In addition, the fee structure established in the ordinance may serve additional purposes, including covering costs incurred by the municipality to deal with vacant properties and, under some circumstances, motivating owners to restore and reuse vacant properties.”

An example of a more aggressive, statewide approach to dealing with vacant properties began last year when New York State Governor Andrew M. Cuomo signed S.8159. The legislation contained a component (Part Q) that addresses vacant and abandoned properties by expediting their foreclosure, creating an electronic registry, and imposing a pre-foreclosure duty on banks and servicers to maintain them.

Legislation that aims to expedite, or “fast-track,” the foreclosure process for vacant and abandoned properties has been gaining considerable momentum as of late, and like in New York, similar laws have been enacted in several states, including Ohio, Pennsylvania and Illinois. Fast-track foreclosure laws have the power to literally cut the amount of time a property takes to complete the foreclosure process in half – in some cases from two years to three months. This difference in time frame allows a property to get back on the market and hopefully sold or rented much faster, removing it from the threat of vandalism, theft or deterioration.

Receiving widespread media coverage and publicity since its creation in 2015 has been the New York “Shame Campaign.” Championed by Assemblyman Michael Kearns and Buffalo Common Council Member Dave Franczyk, this program works to not only shed light on properties in the Buffalo area that have not had the foreclosure process completed, but also identify the appropriate loan servicer in order to spur action.

Finally, the best current example of an action that impacts both servicers and their field services companies recently played out in the Washington Supreme Court. As related pieces of legislation have already been introduced in the state, the impact of the decision will continue to reverberate across the industry.

In 2016, the case of Jordan vs. Nationstar garnered a decision that challenged the standard operating procedures of the industry. The court ruled that Washington law prohibits lenders from taking “possession” of property prior to foreclosure, regardless of language in the deed of trust. So, the lender may not take “possession” after default but before foreclosure.

In this particular case, the servicer’s vendor changed the front door lock, and the only other door was a sliding rear glass door. Therefore, there was no key the mortgagor could use to access the property without calling the servicer for a lock box code. In the court’s opinion, this constituted “possession.”

The court did not address whether it would constitute “possession” if only a secondary lock was changed and the mortgagor’s key would still work on the front door or some other door.

As the decision from Jordan vs. Nationstar, as well as the different types of legislation discussed previously, continues to pick up steam across the country, the significant effect it will have on servicers, their field services companies and communities will be strongly felt. Some servicers have stopped preserving those properties due to the decision, which will have a negative impact on neighborhoods and make it more difficult for field services companies to maintain a property once it finally goes to foreclosure. The need for communication between decision-makers and the industry they stand to impact is more important now than ever.

Outreach and education

The true core of successful legislation tracking lies in the ability of field services companies to engage all levels of local government and strive to build mutually beneficial relationships while delivering a vital educational message. Once established, these relationships will bear multifaceted fruit benefiting all connected parties by solidifying open communication channels and providing true understanding and insight.

Field services companies, including our own, which actively engage in community initiatives outreach, openly approach and create dialogue with municipal officials, code enforcement departments and elected officials. The primary goal is to establish healthy communication between corporate and community parties and ensure that best practices are shared with legislators and practitioners. This is achieved through the delivery of face-to-face presentations, providing municipalities with a high-level overview of the field services industry and its processes. As relationships advance, companies could eventually place themselves in a position to advocate on behalf of the industry and mitigate the proliferation of ordinances or legislation that intends to help consumers but has the unintended negative impact on communities. Assistance also could be provided to objectively provide guidance on ordinance text language so as to eliminate confusing or ambiguous language and promote compliance.

To reach the widest audience possible and build a healthy contact base, field services companies and servicers should participate in organizations such as the National League of Cities, the National Housing Conference and the Center for Community Progress. In turn, they should work to present at related conferences. Examples of these types of events would be the annual American Association of Code Enforcement Conference and the International Code Council Educode Conference.

As previously outlined, successful governmental relationships may present an opportunity for field services companies to provide objective input in the drafting of ordinance language. With regard to relevant legislative tracking, companies could routinely make an inquiry to contacts concerning impending measures and request to stay in the loop for timely updates. The reach and quantity of valuable information is only limited by the amount of existing jurisdictions.

It should be noted that although there is a great opportunity to collect legislative tracking data from municipalities themselves, it is by no means the only source field services companies can use to gather leads. A considerable amount of time should be devoted to research by scanning municipal websites and monitoring state houses and council chambers. Also, because of the higher level of media coverage and subsequent article availability on the Internet, companies should perform general Web searches and stay up to date on industry news.

Lastly, as regulations impacting servicers are identified, companies can also take part in calls offered by the Mortgage Bankers Association that review and discuss them at length. Call participation will not only provide pertinent education and awareness, but also serve as a platform to foster dialogue within the industry.

Communication and technology

Once the heavy lifting of implementing processes to track legislation has been completed, field services companies should focus on how to provide information as quickly and accurately as possible to clients and internal staff. This can be performed by ensuring that communication is constant and consistent, with research updates being scheduled according to legislation hearing dates, house sessions, council meeting agenda/minutes availability, etc.

Next, parameters should be set to ensure that contact lists used for alerts (email blast or otherwise) are being updated regularly. This can be achieved primarily by routinely reaching out to clients for updated individual contact information and double-checking in-house with staff to make sure all desired departments are receiving any news or updates.

Integrating technology to enhance the layout and availability of information is also something that needs to be addressed and revisited often. Larger field services companies currently employ the use of online matrices to display VPRO information. Vital information, such as an ordinance’s date of adoption, is listed, as well as a link to examine a copy of the final version of the ordinance itself to ensure authenticity. Matrices are an effective way to display large volumes of information legibly and are relatively simple to track and update. To date, our firm is tracking nearly 2,800 ordinances across the country, with new ones being added each month.

Companies also may utilize technology such as Compliance Connections, which is a platform that exists to assist local governments in identifying and communicating with a property’s current loan servicer. This service is beneficial to both parties, as it streamlines the entire communications process, helps to efficiently remediate possible violations and promotes compliance. To make this possible, trained staff members utilize proprietary, private and public databases to access the most up-to-date information available and, in turn, offer instant notifications and establish proper communication channels.

Mortgage servicers are increasingly utilizing their field services companies as a resource to provide industry information and news. Proactive companies that track relevant legislation that stands to impact the servicing industry provide a service that elevates the concept of protecting their clients’ interests. By engaging all levels of local governments, performing research and utilizing technology, field services companies can, in turn, galvanize their role in providing timely and accurate updates to their own staff and their clients – just like Jack Bauer had to rely on his team of experts for the most up-to-date information.

Michael Halpern is the director of community initiatives for field services company Safeguard Properties. He can be reached at michael.halpern@safeguardproperties.com.

Source: Servicing Management

Additional Resource:

Servicing Management (Beyond Property Preservation: Proactively Tracking Legislation pdf)

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CHEIF 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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VP, Finance and Vendor Management

Joe Iafigliola

Joe Iafigliola is the vice president of finance and vendor management for Safeguard. Joe leads the accounting and information security departments, and is a key leader in the management of SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets. He also leads the service supply chain including vendor sourcing, field quality control, and delivery, in addition to the quality assurance function for the company.

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, Human Capital

Jennifer Anspach

Jennifer Anspach is the assistant vice president of human capital 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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Director, Business Development & Marketing

Tim Rath

Tim Rath is the director of business development and marketing 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.