CMIS Focus eMagazine – Addressing copper theft to combat urban blight
Robert Klein, CEO of Safeguard Properties, contributed an article to the CMIS (Coalition for Mortgage Industry Solutions) Focus emagazine about theft prevention in vacant properties.
Addressing copper theft to combat urban blight
By Robert Klein, CEO Safeguard Properties
Across the country, in cities large and small, our company has witnessed what newspapers and police blotters have reported — significant increases in metal theft from vacant properties, with copper as a prime target.
The rise in thefts is fueled by scrap metal prices that have doubled and even tripled in some markets during the past three years because of growing demand.
The opportunity to make money stealing and selling scrap metals has been so compelling that thieves have risked death, serious injury and jail time to strip metals from city streets, cemeteries, new construction sites and, where it impacts our industry the most, vacant homes.
Metal thefts not only are dangerous for criminals, they create serious hazards for entire neighborhoods when thieves break working water and gas lines and cut live electrical wires to reach copper components.
Theft of copper and other metals in vacant houses contributes significantly to urban blight. While metals stripped from one home in less than an hour can bring hundreds of dollars through a scrap dealer, the cost to repair the damages left behind can run into the thousands.
Especially in struggling neighborhoods, when homes are stripped of their metals, they are also stripped of any value after thieves tear up floors and punch man-sized holes into walls to gain access to copper pipes. Stolen plumbing often causes severe water and flood damage, and the theft of electrical wiring increases the risk of fire.
In fact, metal-stripped properties often end up with negative value because demolition costs can range from $5,000 to $10,000, depending on the market and the size and condition of the property. Many property owners simply abandon these homes, leaving neighbors and cities to deal with the resulting nuisance and eyesore.
Deterring thieves and protecting properties
Cities, neighborhood groups and the mortgage industry have tried many ways to deter metal thieves because of the devastation they leave behind. Increasingly, cities and states have begun to consider and enact legislation requiring scrap dealers to obtain proof of ownership for certain high-theft metal items, and to increase their record-keeping and reporting.
Community and block organizations have strengthened neighborhood watch groups and stepped up efforts to educate neighbors and encourage them to be more vigilant in watching for and quickly reporting suspicious behavior at vacant homes in their neighborhoods.
Likewise, the mortgage and field services industries have routinely taken steps to deter metal thieves and better protect properties from the devastating damages they wreak.
First and most obvious, the simple fact that lenders and servicers utilize field service companies to inspect, maintain and secure vacant properties is a strong deterrent. Thieves are less likely to target properties that appear to receive regular attention, and that have been secured by field service professionals.
Field servicers are always seeking better ways to secure and protect properties on behalf of their clients. For example, Safeguard Properties recently announced a Good Neighbor Door Hanger program to combat thefts and other problems at vacant properties under management.
Under this program, once a property has been secured, in addition to placing a sticker on the front door of the property with emergency contact information, as is standard in the industry, Safeguard will visit neighbors to let them know that the company is managing the property. A door hanger with 24-hour emergency contact information is provided so neighbors can alert Safeguard if an issue arises. It is hoped that this program will encourage neighbors to be more vigilant in watching vacant properties and providing an early alert to report suspicious activities and deter thefts and vandalism.
One of the best ways to protect a vacant property is to give the appearance that it is occupied. While plywood boarding placed over doors and windows that have been breached is effective in keeping properties secure, it is not aesthetically appealing and makes it more obvious that a property is vacant.
Among the initiatives being tested in the industry is artistic boarding, in which plywood boards are covered or painted to give the appearance of actual window panes and doors so that vacant homes are not as obvious and offer a more attractive appearance among other homes in the neighborhood.
Similarly, the industry is upgrading the service packages on post-foreclosure REO properties, as they languish longer on the market and compete increasingly with traditional market homes. For servicers and investors, these homes are even more important to protect from the destruction caused by metal thieves because additional dollars have been invested in them to prepare them for market.
Upgraded services to REO properties include maintaining the exteriors to a neighborhood standard to make them appear occupied, thus deterring theft and vandalism.
The industry also has increased outreach efforts to open lines of communications nationwide with code enforcement officials. An important component in this initiative has been to provide an easy way for code enforcers to obtain contact information for mortgage lenders and servicers. An updated listing for the majority of lenders and servicers is now available through the Mortgage Bankers Association Web site, under its Property Preservation Resource Center (www.mortgagebankers.org/propertypreservation). As a result, when properties experience problems, code enforcers can more quickly identify the person responsible for maintaining a vacant property on behalf of the mortgage lender or servicer. This assures that issues can be addressed quickly and that properties remain safe and secure.
Vacant property registration ordinances
A recent and growing effort by cities has been to enact vacant property registration ordinances, largely in response to increased vandalism and the blight that results when these properties remain unattended. The ordinances allow city officials to reach responsible parties and hold them accountable when code violations occur.
While the industry supports the concept of the ordinances and understands the need for cities to take action, based on our experiences in the field, we believe many of the provisions in ordinances enacted around the country actually have the potential to create consequences that are more severe than the problems they are attempting to address.
This is why mortgage servicers and field servicers have formed a National Vacant Property Registration Committee under the Mortgage Bankers Association to offer our expertise to assure that cities enact the most effective ordinances possible.
With respect to thefts of copper pipe and other metals, the committee has attempted to discourage cities from enacting provisions that draw more attention to the fact that a property is vacant, or that require the installation of materials that are particularly attractive to thieves.
For example, some ordinances require that a large sign be posted in front of a vacant property, readable from the street, identifying a point of contact in case of emergency. The sign itself is more likely to draw criminal behavior, as it identifies the property as vacant. Better alternatives already are in place to identify contacts in a timely manner.
Other provisions under consideration have called for responsible parties to install exterior lighting to vacant properties, or to install metal panels as a more attractive alternative to plywood on doors and windows. In both cases, the lighting and the panels themselves are desirable items for thieves to steal for their scrap value. Artistic boarding, as an example, may be a better option to address the aesthetics and security concerns at the same time.
It is unfortunate but true that even vacant properties under management by field service professionals will become targets of thieves looking to score large quantities of scrap metal for fast profit.
However, working together as an industry, and by reaching out to cities to address the challenge in a spirit of cooperation, our hope is to help deter criminals and minimize damages so that vacant properties can remain viable and return to family homeownership as quickly as possible. There is no better way to combat vacant blight and preserve and maintain the integrity of neighborhoods across the country.
Robert Klein is CEO of Safeguard Properties, the largest privately held mortgage field services company in the U.S.