Buffalo News “Salvaging Foreclosed Homes”

A recent article in The Buffalo News chronicles efforts by the servicing industry to return abandoned properties to productive use.

Salvaging foreclosed houses

Crews clean, repair, monitor homes for eventual resale

Paul Dinehart gripped the railing and tested the faded wood steps before mounting them to the porch and striding to the front door of the East Side home. Unlocking it, he pushed it open slowly, calling out ?Hello? Hello?? in a booming voice.

Not receiving or expecting an answer, he stepped gingerly inside the foyer, past a broom and an exercise bike, and onto the dirty brown carpet, which was littered with papers, books, bags and other garbage. A white plastic chair and a blue AB Lounge Sport fitness machine stood along the wall.

?Careful, the floor is buckled here,? he cautioned his colleagues and a reporter behind him, as he moved farther into the house and felt the floor move beneath his shoes.

The three-story, blue-gray house has been recently abandoned by its owner, driven away by the threat of foreclosure initiated by his or her mortgage company.

Left behind in what seems like a hurry is the debris-filled, neglected property, covered in muck and filth, with a host of belongings haphazardly strewn around in various states of disrepair. A burst pipe on the second floor had caused water to cascade down as far as the basement, but that?s now receded, leaving dust, mildew and destruction in its wake.

But Dinehart and his colleagues don?t care about what happened before, or even whether the devastation they see was deliberate or just careless. Their job is just to clean it up, repair any critical damage, and get the house ready for a new owner. In this case, they estimate that means $20,000 of work.

?Most of the time, we never find out what happens. It?s not our place,? said Dinehart. ?We need to preserve and protect the property. We need to make sure it?s not a house that?s contributing to blight.?

Dinehart is a quality control field representative for Safeguard Properties, an 18-year-old Cleveland- based firm that inspects, monitors, repairs and maintains abandoned and foreclosed homes nationwide for mortgage servicing companies. The company uses a network of 4,000 contractors in all 50 states to inspect or maintain about 450,000 properties at any given time, including about 1,800 in Western New York in the last two months.

He and his co-workers are part of a little-known $1 billion industry whose essential job is to make sure the houses backing defaulted mortgages don?t lose value and can be quickly put back on the market. Otherwise, lenders can?t recoup losses, and are stuck holding real estate.

?The immediate goal is to make sure the value of the property does not deteriorate. We do whatever we can to maintain that condition,? said Safeguard spokeswoman Diane Roman Fusco.

With the nation engulfed in a mortgage crisis that threatens to send up to 2.2 million homes into foreclosure, most of the attention has focused on the impact on borrowers, lenders, and investors, and how to prevent foreclosure. There?s been little discussion of what happens afterwards, though.

The mortgage industry today is highly complex, with loans originated by brokers, sold to Wall Street, and packaged into investment pools whose income stream is sold in pieces to investors. But behind every investment security is a loan, and behind each loan is still a house, on a block, in a neighborhood where other people live.

Western New York has not been hit as hard as many parts of the country, largely because the region never saw the housing and mortgage boom found in California, Florida, and Arizona. But even with a significantly lower subprime foreclosure rate here ? 5.6 percent versus 9.7 percent statewide ? there are nearly 200 homes in foreclosure just in the city of Buffalo, and 509 in the eight-county area, all because of subprime loans.

Besides causing a loss to the lender, foreclosed, vacant and derelict homes can devastate the communities around them. Neighboring property values fall by at least several thousand dollars, municipal tax revenues drop, and cities and towns must spend thousands of dollars just to inspect each abandoned home, let alone maintain or fix them. Demolishing houses can total hundreds of thousands of dollars or even millions of dollars a year for large cities.

?It?s a crisis. Communities are reeling,? said Joe Schilling, director of research and policy for the Washington, D.C.-based National Vacant Properties Campaign, a collaboration between Smart Growth America, Local Initiatives Support Corp., and the Metropolitan Institute at Virginia Tech. ?It?s going to be the local governments and the neighbors that are going to be left holding the bag.?

The mission of companies like Safeguard is to prevent that. Much of their work involves just inspecting a home after a borrower has defaulted, to make sure the house is still occupied, determine its condition, and report back to the client.

The companies only turn to active preservation when the homeowner abandons the home or the foreclosure is completed. At that point, the lender takes possession, and the property is considered ?Real Estate Owned? ? or REO in industry terms ? on its books.

Comprehensive repairs

In the past, the companies did just basic work for their clients, literally taking out the trash and cleaning the houses of any debris, food and belongings left behind. But as the mortgage industry has exploded in size and its needs have evolved, so have the services they provide.

They still secure the properties with locks, board up broken windows, and repair any significant structural damage ? such as roof leaks or burst pipes ? as soon as they take possession of a house for a lender.

But now they also ?refresh? the properties, providing maid service, mopping floors, wiping up dust, vacuuming carpets, and arranging for the grass to be cut, hedges to be trimmed and snow to be removed. They also ?winterize? the plumbing, shutting off water, draining lines, and taking any other steps to ensure pipes don?t burst and houses don?t flood.

?The services used to be basic, but now it?s becoming more refined,? Fusco said.

They even put air fresheners inside the houses so potential buyers aren?t turned off by any odors.

?The majority of properties . . . are usually left with tremendous amounts of debris and varying levels of filth and scum,? said George Correa, a real estate agent with Western New York REO Specialists, a division of Hunt Real Estate ERA that offers the same services as Safeguard, but also markets and sells the homes as a broker.

?If a property has a lot of garbage in it, it creates a negative atmosphere and the offers you get reflect that. If you clean it up, hopefully you can get a little bit of a better offer.?

Take the East Side home that Safeguard just secured. The kitchen sink was full of water, while a pair of scissors and a tampon package sat in the bathroom sink next to a stick of Secret deodorant and a flattened roll of toilet paper. A carton of eggs and a box of Minute Rice stood on the kitchen counter.

Ceiling tiles and cracked porcelain shards littered the bathroom floor near a dirty toilet. A torn mattress lay on the floor of the nearby bedroom, with scattered clothes, papers, and a black-and-purple wig alongside, and a music CD, phone book and large fan in the next room. In the basement were cans of paint and paint thinner, a bookcase with warped shelves, and a computer monitor.

?We don?t know the situation with the people, but obviously they?ve left stuff,? Fusco said. ?These are desperate situations for these people. They?re losing their properties. Chances are they have other issues as well.?

15%-20% are trashed

And that?s not uncommon. Correa said 15 percent to 20 percent of the 70 to 80 properties

his team handles at any given time are trashed. ?And the amazing thing is people were living there,? said Correa, who handles about 300 homes every year and works for about 20 clients. ?They made an even bigger mess when they didn?t care anymore [but] these people actually lived like this.?

Sometimes homes are vandalized, either by the former owner or someone who saw they were vacant. The rising price of scrap copper has made theft of copper pipes commonplace in the last 10 months, with vandals ripping through walls and causing several thousand dollars in damages to get less than $100 worth of copper.

Kitchen counters, bathroom toilets, lights, hot-water tanks, and even furnaces have been stolen. Correa has even found windows and doors missing, only to look across the street to see a neighbor installing new ones that didn?t quite fit.

?You look at that, and you can?t do anything,? he said. ?You just avoid a confrontation.?

But while much of the mess has to be cleaned up, crews don?t throw everything out and don?t repair everything. Some belongings get taken to storage in case the owner reclaims them. And once the home is secured, many decisions about large repair projects or enhancements are up to the mortgage company, which will only do what is necessary and appropriate for the neighborhood, but won?t spend more than the house is worth. So the basic guideline is simply to address ?anything that would deter a sale,? Dinehart said.

Most homes don?t require too much work.

Safeguard in mid-November secured a yellow duplex with red doors and shutters and tanpainted bricks on the Upper West Side following an eviction. The company removed debris, addressed a minor roof leak that had caused water damage, and provided maid service.

But several walls still have picture hooks, colored pins and nails in them, and one bedroom has fluorescent yellow stars of various sizes stuck on the wall. The carpeting lining the front stairs is torn in several places. And there are holes carved into the wall above two closets.

?Something like that wouldn?t deter a sale,? Dinehart said.

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,?OH? 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 450 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



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.