Cheat Sheet: What to Expect from Regulators in 2016

Industry Update
December 14, 2015

WASHINGTON – Mortgage lenders and servicers weary from a raft of regulatory changes in recent years may see some respite in 2016.

While many lenders are still struggling to implement new mortgage disclosures – an area likely to be a focus in the New Year – and face new Home Mortgage Disclosure Act requirements soon, the pace is still likely to slow.

“Thankfully the onslaught is somewhat over,” said Robert Lotstein, managing attorney of LotsteinLegal in Washington.

Still, lenders will face significant challenges in 2016. Following is a guide to some of the biggest ones:


Industry groups all but begged Consumer Financial Protection Bureau Director Richard Cordray for a temporary safe harbor to shield lenders from possible lawsuits and enforcement actions when new mortgage disclosures went online on Oct. 3. But despite reports of vendor problems with the new Truth-in-Lending/Real Estate Settlement Procedures Act integrated disclosures, the agency has refused to grant a formal safe harbor.

Instead, it has pledged not to punish institutions that make a “good faith” effort to comply with the new rules.

“We are still operating under this good faith compliance framework, which I think is helpful,” said Pete Mills, senior vice president at the Mortgage Bankers Association.

Yet that informal grace period will expire sometime in the New Year, and there are a number of TRID issues that must still be clarified.

The industry is hoping for the CFPB to provide guidance that will help narrow the differences in TRID interpretations between lenders and loan aggregators.

When a lender goes to sell a loan to Wells Fargo, U.S. bank or JPMorgan Chase “all three should be willing to buy that loan because it is following a common interpretation of TRID,” Mills said.

Other industry representatives are hoping the CFPB will provide some clarity around non-standard loans, such as home construction-to-permanent loans. Borrowers like the security of a single construction-to-perm loan closing because they can lock in the mortgage interest during the construction phase.

“Some lenders are finding ways to do it but others are anxious” said Robert Davis, an executive vice president with the American Bankers Association. Because of TRID, they are separating the construction and permanent loan closings.

“There are other special loan products where there is uncertainty about the loan disclosures,” Davis added.

One overarching question is when the CFPB will end the grace period – and what kind of actions it will take related to the new disclosures.

The Return of HMDA

The CFPB finalized a rule this year that requires the industry to collect more data under HMDA. Though the rule doesn’t go into effect until 2018, it’s still a massive undertaking.

The new HMDA rule adds 25 new data points and modifies 14 others in addition to the existing 9 data fields that were already required. Lenders must also begin reporting data on other types of loans like reverse mortgages and home equity lines of credit for the first time.

“Next year, lenders will have to start figuring out how to capture the data,” said Davis. “You can’t wait.”

Lenders are already beginning the process of complying with the new HMDA rule and some industry representatives are hopeful it will be relatively smooth.

This is just a matter of “getting through the implementation process,” said Ron Haynie, a senior vice president at the Independent Community Bankers of America. “I don’t think it will be a hard year where you have to digest 1,000-page rules every couple of months.”

New Servicing Rule

The CFPB is expected to issue a final servicing rule in mid-2016 that will also require a lot of system changes. This rule addresses the servicing of troubled loans, transfers of servicing from banks to non-bank servicers and loss mitigation.

“It won’t be as earthshaking as the first servicing rule,” Davis said in an interview. But the 500-page rule is still going to require a lot of system changes and training to ensure compliance.

Loan Certification Regulations

Lenders are also anticipating that the Federal Housing Administration will finalize its loan certification rule early next year. The contentious regulation has already been issued for two comment periods.

Industry groups are hoping FHA will provide more clarity around loan defects or errors that could result in penalties or indemnification for loan losses.

“It is a complicated issue,” said Mills. “But you need to have a standard that doesn’t put folks at risk of treble damages for minor, non-material document or other underwriting defects.”

Scott Olson, an executive director of the Community Home Lenders Association, noted that lenders will be watching to see if FHA comes up with a fair standard or just tries to stick lenders with loans that go into default.

The loan certification rules will also have an impact on FHA’s initiative to get lenders to serve lower credit score borrowers.

“Lender perceptions of where FHA is on indemnification and False Claims [Act] can have an impact on their willingness to lend to lower FICO borrowers,” Olson said.

Condo Rule Changes

FHA also is working on reviving its condominium loan program by streamlining its approval process. The Department of Housing and Urban Development is working on a plan to make permanent alterations to its owner-occupancy requirements, limits on commercial space and spot approvals.

Spot approvals would make a single unit in a non-certified condo building eligible for FHA-insurance. FHA stopped allowing spot approvals several years ago.

HUD data shows that FHA condo loan endorsements dropped to 22,800 in fiscal year 2014 from 57,800 a year earlier.

Working Overtime

Meanwhile, the Department of Labor is expected to issue a final rule next year that that will govern overtime pay for all workers, including mortgage loan officers.

The MBA staged a multi-year legal battle to deny overtime pay to loan officers. But that was settled in March when the Supreme Court unanimously ruled that loan officers are entitled to overtime pay after a 40-hour work week.

The final rule is slated to be issued in June and it upwardly adjusts the salary thresholds for workers that are eligible for overtime.

“If implemented as proposed, the rule would increase the salary threshold, under which most salaried workers are guaranteed overtime pay, from $455 a week – roughly $23,660 a year – to a projected $970 per week in 2016, or approximately $50,440 a year,” said Heidi Shierholz, the chief economist of the Labor Department, in a blog post earlier this year. “This new rule will help ensure that millions of additional workers are fairly compensated for the hours they put in on the job and will make sure that their overtime protections won’t again be allowed to erode.”

Source: National Mortgage News



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.