Safeguard’s Executives Tackle Critical Communication, Pandemic Management

Safeguard in the News
June 3, 2020

Source: DS News (PDF)

Online Version: Lines of Communication in Mortgage Services

The executive team at Safeguard Properties discusses the critical nature of communication, and how the industry is managing the pandemic.

In 2020, our industry, our nation, and our world as a whole, found itself confronted with an unprecedented health crisis in the form of the COVID-19 pandemic. This year also marked the 30th anniversary of Safeguard Properties’ work in the property preservation and field services sector. That would be an auspicious achievement under any circumstances, but this year has provided little time to celebrate. While those decades of experience spent developing and evolving a disaster response playbook no doubt served as a valuable foundation, both Safeguard and the industry as a whole have been forced to reexamine policies, adapt on a nearly daily basis, and navigate a crisis that has no clear ending point.

Looking back over those three decades and ahead to the challenging months to come, the Safeguard executive team recently spoke to DS News about key takeaways from the pandemic and what they’re doing to prepare for an uncertain future.

DIGGING THROUGH THE NOISE
Terry Smith, CEO of Rushmore Loan Management Services (a client of Safeguard’s), told DS News, “Natural disasters aren’t going away. They can happen at any time, and you have to have a plan in place to be ready for the myriad of unknowns that come with these types of disasters.”

While the company’s extensive experience in natural disaster preparation and response may not have helped anticipate every aspect of this current health crisis, the Safeguard executive team told DS News that many lessons do apply.

“The most important thing is to stay nimble,” said Joe Iafigliola, CFO. That nimbleness includes staying apprised of all relevant changes and updates from a federal on down to a community level and ensuring those updates are communicated effectively to the vendor network. “It’s important that we track specific levels of federal disaster response and communication. Policies are not necessarily consistent at each level of government. We have to understand and act as policies change.”

Iafigliola added that everyone has to recognize that “when you have a localized disaster, the people who do the work live in the impacted community. They, and their families, are often impacted as well.” This means property preservation companies need to have contingency plans in place to bring in inspectors or contractors from neighboring states, counties, or cities while the locals are working to get back on their feet.

Michael Greenbaum, Safeguard’s COO, agreed that communication is the backbone of any sort of disaster response, whether the root cause is a storm, a wildfire, or a flood.

“Everyone can see the news,” Greenbaum said. “They can read the local paper. But what they don’t know is, physically, what is happening in these areas, down to an individual property level? What is happening at my property, as a servicer, as a bank?”

Smith noted how critical updates on topics such as FEMA Declarations can be—or even alerts about disasters with the potential to become an official FEMA Declaration.

“Those are extremely important to the clients,” said Tim Rath, AVP of Business Development, “especially because we often have to sift through the FEMA website to navigate and find the correct information.”

Greenbaum added that a service provider, such as Safeguard, must not only provide critical information regarding disasters, but it also has to analyze that data to provide real context to its clients. “Are we identifying trends? Are there multiple houses on the same street?” Greenbaum asked. In Safeguard’s case, they utilize a visual overlay to denote trends and levels of severity, with red representing the most damaged or impacted properties.

Alan Jaffa, Safeguard’s CEO, explained that in the instance of a disaster—as we spoke, he pointed out that Collier County, Florida, was at that moment fighting a series of dangerous wildfires—the company will automatically alert their clients about any parts of their portfolios that could be affected by the situation.

“Whether you’re a client or not a client, we’ll put you in the database and keep you informed,” Greenbaum said. “But [for clients] we try to be very, very custom. You’re going to get back specific, detailed information from a dedicated report, and then we’re going to provide photos so they can see the extent of the damage.”

Jaffa said the goal is to be providing the servicer or investor with updates before they even realize they need them.

“We are constantly grabbing that information for the industry,” Jaffa added.

Safeguard’s CIO, George Mehok, discussed how the company’s use of geocoding and GPS-enabling each property in a customer’s portfolio allows them to drill down into extremely small levels of detail that can provide crucial insights before, during, and after a crisis.

“When there’s a fire, for example, we can determine which properties are potentially impacted, because we also bring in data from national sources and federal sources that we overlay. We can tell a client early on in a disaster how many properties in their delinquent portfolio are impacted, even before we dispatch the first inspector. Then they can assess what the overall potential situation is.”

That information flow, however, is very much multidirectional. Some of the most important information a servicer needs may come not from a government agency, but rather from the “boots on the ground”—the contractor and vendor base. They can provide the local-level nitty-gritty, such as details about road flooding, that may be important but not provided from other sources.

“One big challenge is just staying organized,” Greenbaum said. “We have to dig through the noise to get the right information, but we don’t want to become a noisy source ourselves. We want the information we pass on to be clean.”

“This is one big reason why we love to work with local vendors. They understand what’s going on in their area, and they’re more equipped at times to deal with cultural-type things that are happening in different communities. They’re there—they know the community; the people in the community know them. Code officers are familiar with them. That’s why it’s a huge advantage for us to work with our local vendors.”

The demographics of those impacted by natural disasters may shift in the years to come as well, as various factors hold the potential to reshape how and where Americans choose to live. If telecommuting becomes more common, will large urban centers see less demand than more affordable locales?

“People live where the jobs are, but they are more aware of living in more ‘risky’ areas,” Rushmore’s Terry Smith said. “For example, folks look to move away from flood areas and even concentrated cities. Government assistance programs are encouraging this—look at Puerto Rico where aid is being given to relocate out of flood zones. As remote work becomes more common, you may see folks start to move away from the cities in which the physical companies are based into areas that are deemed less ‘risky.’ That could be telling.”

However, in general, there’s also been a trend among Americans toward warmer climates and more coastal areas—regions which bring some inherent risks when it comes to natural disasters.

“As people shift toward those coasts and those areas that are easily impacted by natural disasters, it puts more people in the path,” Rath said.

A NEW KIND OF CRISIS
The impact of COVID-19 has been felt far and wide across all parts of the American economy and way of life. At the end of May, Black Knight reported that the national delinquency rate experienced its highest single-month increase in history in April. Some 3.6 million homeowners were past due on their mortgages as of the end of April (including the roughly 211,000 who were in active foreclosure)—the highest number since January 2015.

The national delinquency rate nearly doubled to 6.45% from March, the largest single-month increase ever recorded, and nearly three times the previous record for a single month from back in late 2008. According to Black Knight data, close to 9% of all active mortgage loans were in some form of forbearance as of the week of May 15. This amounted to a total of 4.7 million homeowners, up from 4.5 million loans reported the week prior.

According to the Bureau of Labor Statistics, the advance seasonally adjusted insured unemployment rate for the week ending May 9 was 17.2%.

“We understand more than ever that these types of issues are not necessarily preventable nor the customer’s fault,” Rushmore’s Terry Smith said. “When these types of situations arise, it’s important to understand the needs of the customer and to work with them to get their situation corrected. It also helps to understand that the needs of our own workforce need to be accounted for, as many of us are impacted in the same way as our customers.”

Smith told DS News that, operationally, he believes that the industry’s COVID-19 response has been simpler from a preservation perspective than with some natural disasters, “as the ordering, tracking of Inspections, and MSP flagging of the loan has become a very efficient and fast process.”

“This is uncharted territory,” Greenbaum said. “Nobody has any idea how long or to what extent it will last, so there’s definitely an information gap. A lot of what we’ve tried to do is to just talk to the right people and then pass that information along to our clients.”

According to the Safeguard team, one of the first things they did in March was to host critical discussions with investors and agencies to try and get a feel for their expectations of what was to come.

Another critical question during those early days for property preservation in particular: would this sector fall under the category of “essential services?”

“Is it okay to continue to do your job every single day?” Greenbaum asked. “That was one [area] where we were pretty aggressive in understanding our position we could communicate with our contractors and our inspectors.”

There were lessons to be applied from both past natural disasters and the 2008 financial crisis, but one key difference came down to the simple matter of scale.

“We’ve built solid gameplans for disaster response in certain regions, for certain types of disasters,” Jaffa said. “But how do you manage that when it’s the entire country?”

Greenbaum said that most of the Safeguard leadership team had been in place during the previous housing crisis, so “we all knew the need to be able to expand quickly.” This led to Safeguard’s strategy of maintaining a broad network of vendors, rather than concentrating a lot of volume on only a handful of vendors.

“We always attempt to work with local vendors with boots on the ground for redundancy reasons, but also scalability reasons,” Greenbaum said.

Nevertheless, this was a crisis where the unknowns far outweighed the knowns. While this reality complicates the already challenging process of ensuring workforce scalability, Greenbaum explained that the fundamentals still apply.

“We don’t know what the overall impact of forbearance is going to be. We don’t know what the timing or impact will be on the court system,” Greenbaum added. “But our response is still based on our ability to scale our independent contractor networks quickly, so we’ll use those same lessons learned.”

“Trained vendor capacity is also a concern as the spike in necessary preservation services will likely be significantly increased once moratoriums have been lifted,” Smith told DS News.

Greenbaum said that, whether REO volumes change significantly due to COVID-19 or not, the way the company has evolved its systems and workstreams will allow it to scale and to shift team members around to meet needs quickly and efficiently.

“All the core fundamentals around what we do remain relatively the same, with a few adjustments,” Greenbaum added. “There’s minimal ramp-up time to get people moved around.”

Mehok credits the guiding philosophy of Safeguard’s founder, the late Robert Klein, with helping set the standard for his company’s nimble approach. That approach demands an ongoing investment, according to Mehok:

“In the company, in employees, in training, and in technology. If there’s a quick ramp-up in volumes, we’re prepared because of that ongoing investment in the long-term. Because of the experience in dealing with the financial crisis, with the natural disasters, we know that, as a company, you have to be prepared. ‘Plan for the worst, hope for the best’ is part of the culture.”

SHIFTING SANDS
One aspect of the industry that became even more pronounced after the 2008 crisis— and in light of modern challenges such as the pandemic and increasingly damaging natural disasters—is a commitment to ensuring compliance. That can be easier said than done, given the complex and ever-shifting web of regulations encompassing the mortgage industry.

As Linda Erkkila, Safeguard’s General Counsel, notes, “When you have a natural disaster, you have a start and you have an end, in one geographic territory, and the response is somewhat familiar. [With this pandemic,] every state is impacted, the end date is uncertain, and every state can respond differently based on its impact. Everyone is trying to do the right thing, and they’re acting very, very quickly—but then they’re also changing very, very quickly. So, it’s critical to keep up with the mandates but you have to accept those can change frequently during these unfamiliar times.”

“Fast forward a year from now, I can tell you that the different states and cities within will have all new things that we haven’t even thought of yet,” Jaffa said. “No one was thinking about vacant property registration in 2007 or 2008, and now that’s just part of life in this business. In 12, 18 months from now, we could be in a place where before you do an inspection, before you cut grass, you need to let us know if the property was in a forbearance plan, for example.”

Mehok said that improvements in technology over the past decade have made all the difference when it comes to staying atop the shifting sands of compliance.

“Now, all the communication we have with our vendor base is through a mobile device,” he said. “They collect information through that mobile device, whether it be photos or videos. All of the rules in terms of local-level ordinances, condition of properties, that can all be communicated to those contractors in real-time, collected in real-time from the field, and then submitted in real-time back to the investors and servicers. That type of automated workflow will put the industry and local communities in a much better position compared to 2007-2010.”

Of course, technology has also proven invaluable as the industry, and the world, moved to respond to COVID-19. As I write this, I’m seated at my desk in my bedroom, rather than at Five Star’s offices in Dallas. It’s been more than two months since I’ve seen my coworkers in person, but in many ways, we’re more effectively in touch than ever before—all thanks to enabling technologies such as video conferencing and workflow management apps.

Jaffa told DS News that the use of video conferencing is taking interactions between Safeguard’s team, vendors, and clients to “a whole other level.” He anticipates that that change will become a permanent part of the company’s workflow, regardless of when we return to “normal”—or what that normal looks like.

“Kids are upset in Ohio,” Jaffa joked, “because you’ll never have a snow day again.”

And while the past two months have looked very different from what came before, it seems likely that the road ahead will also look very different than what had served as the status quo for some time.

“It definitely will not look the same, Erkkila said. “We want to be able to flip a switch at any time and let folks come back in and have the office ready for three months, or for three weeks. The big piece is that you want to make sure that, if the employees come back, they are comfortable being back in the office.”

Jaffa said that his team has also utilized the realities of this “Great Pause” to ramp up communication even further with their partners, and about topics they might not otherwise have delved into with such depth.

“In the last two months, I’ve had more meetings with the operational folks, asking them a million questions like, ‘Well, why do we do it that way?’” With so many systems and processes forced to be adjusted to deal with the realities of a pandemic, it’s a perfect opportunity to look beyond the necessary and ensure that things are being done smartly, efficiently, and that best practices are truly that.

WILL THE GRASS BE GREENER?
With so many questions remaining about the months ahead, from what daily work life will look like to how and when the economy will fully recover, there are several key areas of concern that have the industry’s attention.

While discussion about the numbers of homeowners entering into COVID-19-related forbearance plans has been a hot topic for weeks, Jaffa takes the problem down to ground level—literally.

“If a homeowner—whether a tenant or not—is on a six-month forbearance, and they move out, we’re not going to be inspecting that property,” he explained. “Our clients will have no contact for six months. Keep in mind, you could have been in delinquency for 90 days already, and you could get a forbearance. Are you staying? Are you maintaining? Are you out? Neither our clients nor us will know those answers for six to 12 months.”

As one potential problem area, Jaffa said he foresees an increase in grass-cut fines as properties in forbearance sit empty and unmaintained while the forbearance clock counts down.

“There are some adverse impacts on our ability to address property issues if property access is unable to be gained,” Smith said. “That ultimately could impact various communities across the country.”

“It should be concerning for every community around the country that there are vacant properties that may not receive an inspection for up to a year.”

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CHIEF 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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CHIEF 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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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.

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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, 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.

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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, Business Development

Tim Rath

Tim Rath is the AVP of business development 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.

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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.