Weight of the World: Challenges in Property Preservation

Safeguard in the News
November 1, 2019

Source: DS News

Housing remains a bright spot in economic growth, according to commentary from the Fannie Mae Economic and Strategic Research (ESR) Group. Risks to the ESR Group’s forecast remain biased to the downside, while trade tensions between the U.S. and China continue to pose the greatest threat to growth, but housing is expected to be a source of strength in the near term. With this improved economic activity in housing, competition between service providers remains strong.

However, according to Chad Mosely, Chief Relationship Officer at MCS, competition brings its own complications when it comes to maintaining a top-notch team.

“As we are currently experiencing a strong economy, we have seen that finding vendors and employees can often be challenging,” he told DS News. “In addition to not having as many vendors and employees looking for work, we are also competing against a robust homebuilding industry.”

Alan Jaffa, CEO, Safeguard Properties, noted that current employment conditions, at least in the property preservation space, could be impacting costs.

According to Xactware pricing trend data, 2018 average property preservation and maintenance retail labor rates rose by an average 4.3% across the board, with drywall installers showing a 10% increase.

“The labor market also is tightening for skilled talent for inspector/contractor networks,” said Martin. “As volumes decline, it is not as profitable for them to invest time and money in maintaining their mortgage field services businesses.”

The price of property preservation and maintenance has also been in flux in recent years, according to Rob Martin, Product Manager for Property Solutions at Xactware, and with pricing so volatile, costs may not be what they seem.

“Cost data indicated price volatility throughout many categories during 2018 and early 2019,” Martin said. “These price fluctuations, some of which were quite sudden, rendered older and outdated pricing data sets too unreliable for making business decisions.”

Cheryl Travis-Johnson, COO, VRM Mortgage Services, noted that one of the biggest challenges in property preservation is costs between the servicer and the vendor.

“The seller wants to keep costs down, and the vendor needs their costs to cover their profit margin,” Travis-Johnson said. “If they don’t meet in a good place, you risk having the vendor compromise to remain sustainable.”

Staying on the Same Page

Another ongoing challenge on the property preservation front is working to ensure that all stakeholders in the property preservation chain are the same page. Jaffa noted that timeframe problems can often crop up, as not every vendor and service provider works exactly the same way.

“Completion timeframes differ among investors, and local codes often require services beyond the scope of the work assigned to property preservation companies by clients,” Jaffa said.

“Another current challenge we have seen in the industry is the enhanced oversight of cities with vacant properties,” Mosely said.

Over 1.5 million U.S. single-family homes and condos are vacant, representing 1.6% of all homes, according to a new report from ATTOM Data Solutions. The report revealed that there are a total of 9,612 “zombie” homes or properties facing possible foreclosure which have been vacated by their owners nationwide, with the highest number of zombie properties in New York (2,428), followed by Florida (1,634), Illinois (985), Ohio (891), and New Jersey (463).

When it comes to managing these properties, Mosely told DS News that communication is key.

“As more and more cities establish new legislation to protect and preserve their communities, we are constantly evolving our property registration process to keep up with these updates,” Mosely said. “This includes maintaining communication with code officials, reviewing ordinances, and updating our property registration matrix to determine the risk of properties.”

A Daunting Forecast

Of course, damaging natural disasters, ranging from storms to wildfires, earthquakes, and floods, all present an increasingly significant risk to the property preservation industry. Chad Mosely suggested that leveraging technology is the key to staying ahead of these dangers, and to responding to them properly when they do occur.

Advancing technology can allow servicers and vendors to track the paths of storms and identify the properties at the highest risk of damage, Mosley said.

“This permits servicers to prioritize which properties need to be addressed first, and also enables them to prioritize customer outreach immediately.”

Costs, of course, can also be elevated following disasters, as Jaffa pointed out, thanks to factors such as debris disposal.

Many of the challenges associated with disaster preparedness come down to the bottom line of money, both on the servicer and vendor front.

Jane Mason, Founder and CEO of Clarifire, stressed how servicers are going to need to change their previous notions about natural disasters moving forward, at least in part to reduce the current high costs associated with disaster preparedness.

“As any mortgage servicer will attest, managing through natural disaster events can wreak havoc on the cost of servicing,” Mason said. “This is why today’s technology needs to help reduce risk for servicers, as well as their borrowers and investors, when a disaster occurs. The goal is to minimize expenses and add controls during events that can quickly go in the other direction if planning and proactive strategies are not in place.”

In disaster areas, servicers are going to face competition among vendors and local resources, and cooperation is required.

“Not only are we sharing vendors in the affected areas, but many times, the vendors are personally affected by the disasters and may either not be able to perform the work or be limited in the amount of work that they can accept,” Mosely said.

Jaffa concurred, stating, “Property preservation companies need to assess the capabilities of their inspector and contractor networks in the affected area. Often, because those inspectors and contractors in the area of the disasters have been impacted themselves, preservation companies need to reallocate resources for periods of time and adjust as needed.”

According to Alan Jaffa, “time is of the essence” when it comes to these events. This means vendors and servicers must prioritize ahead of time by establishing allowables so affected properties can be preserved on the property preservation provider’s first visit.

“With the volume of properties affected and the potential for serious damages heightened, property preservation vendors cannot get delayed by lengthy bid cycles with the client or investor,” Jaffa said. He also recommended prioritizing damage repairs in a descending manner from most critical to least critical.

“For example, vendors need to address any leaks before they begin cleanup services, like removing water-soaked items and debris,” Jaffa said.

The U.S. has  experienced 36 major disasters so far in 2019, according to data from Fannie Mae, and for those homes in disaster-areas, preparation begins at the building process. Mike Hernandez, VP for Housing Access and Disaster Response & Rebuild at Fannie Mae, stated that “preparedness should include far more than financial steps and logistics.”

A study by the National Bureau of Economic Research found that mortgages written on homes in these “exposed locations” are being shed by banks and absorbed by Fannie Mae and Freddie Mac. “This implies that homeowners and investors have been making location decisions without properly pricing the cost of potential peril, and that the government has been enabling the oversight,” the Harvard Business Review reporter.

Chad Mosely also noted that the number of homes in high-risk areas has grown.

“As growth and population have increased, properties affected by natural disasters have increased,” Mosley said. “As a result, there are more homes in areas that could be affected by natural disasters. As such, it is critical that we continue to perfect processes and technology to address these risks as they arise.”

Mosely added that the most important part of preparation is to have the finances available ahead of time in the event of a disaster, especially those in disaster-prone areas.

“We recommend that servicers have a pre-approved emergency allowable for natural disasters that allow completion of certain emergency work to prevent additional damage (such as drywall removal and water extractions),” he said. “These services could make the difference in a property having repairable damage versus catastrophic damage.”

The problem with preparing, Mosely added, is that storms are often unpredictable.

“There are many instances where servicers will spend time and money protecting homes from damage, but then the storm changes its course and hits many homes not protected,” he said.

To alleviate the headache of dealing with the unexpected, making you sure there are clear guidelines in place between servicers and vendors can make all the difference.

“It would be helpful if investors provided more specificity on how each investor wants mortgage servicers to behave following a major storm or disaster,” Jaffa  said. “Some investors have procedures in place while processes can remain unclear for others. Establishing clear guidelines and continuously updating them following a major storm or disaster will alleviate some of the challenges when managing affected properties.”

The Tech Factor

“Technology needs to help reduce risk for servicers, as well as their borrowers and investors,” Mason said. “Consider implementing technologies that can seamlessly take the customer from onboarding through each phase of servicing, including loss mitigation—with no gaps. Such capabilities are valuable for servicing in general but even more important when evaluating an uncontrollable event such as a natural disaster.”

According to Mason, disasters, tragic as they are, can be a time for advancement.

“The bottom line is that natural disasters do not need to create workflow disasters—nor should they,” she said. “They offer a prime opportunity for servicers to enhance customer service and take a giant technological leap forward. The key is to capitalize on technologies emerging out of digital disruption to manage disaster recovery and win customer allegiance at the same time. By letting automation handle the ups and downs of disaster mitigation, as well as its complexities, servicers can create eternal customer loyalty.”

New technology is already making disaster response easier, as servicers are able to react faster.

“Coupled with improvements in technology like weather-mapping and geo-fencing, clients have the ability to be more targeted in their disaster responses,” said Alan Jaffa.

Of course, the benefits of advancing tech are not just limited to disaster prep and recovery.

Kerry Medel, Client Relationship and Operations Manager for Brookstone Management’s Property Preservation Division, notes how new tech can impact not only costs, but cut time in the QA process.

“Companies today are constantly reevaluating their field services QA processes in the quest to not only reduce timelines but also their exposure by exploring new avenues to integrate automation into their QA procedures,” she said.

“The most successful QA model will not be built solely on the paragon of technology,” she continued. “It will consist of a coalescence of technological exploitation, alongside team members with the most creative, knowledgeable, and analytical minds, who live among the patterns, embracing the errors much more than the successes—it will be a fine balance between man and machine.”

“It is critical that we continue to perfect processes and technology to address these risks as they arise,” Mosely said. “By continuously improving processes, developing our employees, and improving technology, we are able to make our business more efficient and, in turn, be prepared for the future.”



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.