DS News “One Vision, One Voice for Vacated REO”

Robert Klein contributed an article to DS News about the wave of vacant property ordinances being considered by municipalities across the country.

One Vision, One Voice for Vacated REO

A Full-Fledged Effort Between Cities and the Industry to Create Workable Vacant Property Ordinances Is Key to Thwarting Urban Blight

The mortgage servicing industry faces enormous challenges complying with vacant property registration ordinances that either have been enacted or are being considered in municipalities across the country. Not only do these ordinances vary significantly from city to town, but many also are unwieldy and expensive to comply with, and some ironically have the potential to create more harm than the issues they are attempting to address.

One Vision, One Voice

All industry participants share the same goals with regard to vacant properties: maintain the properties and keep neighborhoods safe and secure. Reaching out and opening channels of communications
between municipalities and servicers is always important to build and maintain strong relationships
between our industry and the communities. However, the issue of vacant property ordinances requires that the servicing industry first work collectively to develop a unified voice and common platform in order to speak as one to address issues with municipal leaders on a national scale. By collaborating on best practices in a national forum, the industry can achieve these common goals most efficiently and effectively.

VPR Group Helping Keep Neighborhoods Secure

For this reason, servicers and field service providers have formed an ad hoc Vacant Property Registration Committee under the direction of the Mortgage Bankers Association (MBA) to offer input to municipalities considering ordinances. The goal of this committee is to engage cities in dialogue before they enact new ordinances, ultimately to ensure that the ordinances cities pass will achieve the desired result: effective maintenance of vacant properties to reduce and prevent neighborhood blight.

Currently, the committee is working to develop a “model” ordinance to assist municipalities in their efforts to create effective vacant property ordinances. This model will incorporate provisions from the most effective city ordinances across the country, with the hopes that cities will use it as the basis for creating their own. The purpose in creating this ordinance is not an attempt to impose the industry’s collective will on municipalities. Quite the opposite, it is to help them do their jobs more effectively.

The committee has held a series of industry calls to solicit input from servicing representatives.
Additionally, a list of vacant property ordinances has been developed that includes the municipality, ordinance enactment date, a link to the complete ordinance, and a summary of key issues in the ordinance. The list is available at this link. It is updated regularly as new ordinances are identified. Industry input calls have been held in advance of city meetings where ordinances are being discussed and proposed. In particular, the group has focused on larger cities enacting new ordinances or updating existing ones, since larger cities often become models for other cities to follow. Since May, Chicago and Riverside County, California, have held public meetings to present their proposed vacant property registration ordinances.

Concerns with Key Provisions

Provisions in proposed vacant property ordinances raising concern among industry representatives include the following:

? Lack of uniformity in ordinances

To comply with each city’s different ordinances, national servicers must amend servicing procedures for each individual city in which properties are located. Servicers are concerned that maintaining compliance will become more challenging with each new ordinance enacted across the country. Industry representatives recommended creation of a model ordinance as a guideline for cities to follow.

? Presale vs. postsale registration

Some ordinances require registration of properties within seven days of initiation of the foreclosure process. Servicers are concerned about presale ownership liability and implications of “mortgagee in possession.” A city may attempt to hold the servicer liable for the property, even though the property owner still has the ability to become current with the mortgage. Generally, vague language that is open to interpretation raises concerns. Specific to the seven-day registration requirement, servicers were concerned that this could include occupied properties, since the foreclosure process often begins well in advance of abandonment. The primary benefit of presale registration is that the municipality has a direct point of contact to address violations and safety concerns. With a point of contact established,
the expectation is that there will be a drastic reduction in the issuance of violations and unilateral condemnations. For postsale properties, servicers generally recognize the need to register properties, as they are full-fledged owners. Because servicers are not seeking to retain properties in their inventory, the recommendation is to allow for a registration window of 60 days after taking title or possession.

? Definitions of vacancy status

Servicers would like municipalities to define the term “presale” and clearly define the differences in vacancy status: vacant and maintained and vacant and abandoned. Industry representatives recommended separate registration requirements for presale and postsale properties.

? Presale ordinance requirements

The mortgage deed gives servicers the right and the responsibility to preserve and protect their mortgage collateral in defaulted and foreclosed properties. In presale, servicers are unable to comply with certain ordinance requirements because they extend beyond the preservation and protection stipulations. Examples of those include requirements to grant presale property access to city inspectors, removal of personal property from the interior and exterior of the property, and re-keying of all exits to deny access to homeowners.

? Maintenance contact requirements

Many ordinances require that the maintenance contact be located within a specific distance of the property. This requirement is challenging for servicers who utilize national field service companies. Additionally, in large metropolitan areas, it may require that many different contacts be listed based on the location of the property. Recognizing that the purpose of this provision is to ensure that issues are addressed in a timely fashion, the suggestion is to identify time requirements to address maintenance and safety issues. As a side note, some ordinances may require a city, county, or state contact for the purpose of serving legal notice. This is a separate issue that does not raise the same concerns.

? Registration fees

Registration fees vary widely, from one-time fees of $35 to annual fees in the hundreds of dollars-one locality even requires a $6,000 fee. Representatives raised the question whether fees are reimbursable by HUD and other investors and whether they should be added to the unpaid principal balance (UPB) if the loan is made current. The committee will request investor guidance on this.

? Penalties

Failure to comply with ordinances could result in fines of hundreds of dollars per month per property. In many cases, the ordinances do not consider “intent.” Additionally, in some ordinances, this requirement is vague and may imply that a penalty could be imposed at each occurrence or visit by an inspector. This could result in significant fines.

? De-registration of properties

Many ordinances do not identify a formal de-registration process. This may lead to cumbersome processes requiring inspections to establish proof of re-occupancy. Additionally, industry representatives generally believe that any de-registration process should identify the steps a servicer would take to remove its name in instances, for example, where the loan is sold and the servicer is no longer the responsible party.

? Property maintenance requirements

General statements in ordinances that properties be maintained to applicable building codes and local regulations are too broad, as they may entail code upgrades, cosmetic repairs, and other costly maintenance.

? Securing of windows and doors

In some cities, provisions are being considered to provide a more attractive alternative to boarding. In situations where metal alternatives are being considered, the group raised concerns about the increased risk of vandalism by metal thieves, the additional cost, and that current industry practice of bolt-boarding is the most effective way to keep a property secure from vandals.

? Signage requirements

Many ordinances require that properties have a sign visible from the street displaying the name, address, and 24-hour contact number. The concern is that this type of signage advertises that a property is vacant and actually could invite vandalism. Additionally, this requirement may be unworkable with multiunit structures, within gated communities, or where properties are part of a homeowners or condominium association, as there may be signage restrictions.

? Lighting requirements

Some ordinances impose requirements for lighting the property. This provision raised concerns because it is costly and invites theft of the lights themselves.

A Model Ordinance

Certainly the industry recognizes that vacant property ordinances are essential for communities to have in place to provide cities with legal recourse when property owners and others fail in their responsibility to maintain vacant and abandoned properties.

Additionally, each municipality has the right to enact whatever ordinances it chooses to maintain property values, uphold the integrity of neighborhoods, and protect the community from blight and crime.
At the same time, in enacting vacant property ordinances, cities don’t always understand how the servicing industry works and what efforts are currently being done to protect individual properties and thereby entire neighborhoods. Many cities, for example, are not aware that servicers utilize national field servicing operations to inspect and maintain properties, and that this process is usually far more efficient than having a local point of contact. Clearly, many officials drafting vacant property ordinances are not aware of the legal conflicts that some of their proposed ordinance provisions create. And most cities create ordinances without the benefit of field experience, which would help them consider the potential negative consequences that could result from some well-intended provisions.

Banding Together for Change

This is why the MBA and the Vacant Property Registration Committee are aggressively engaging in outreach efforts to open dialogue and offer the industry help and support to enact ordinances that are effective and enforceable, and that help cities respond to the growing challenges they face in dealing with vacant and abandoned properties-hopes that a “model” ordinance will be a useful resource for them.
In addition to reaching out to individual cities when ordinances are being considered, the industry is also raising awareness about the issue and offering its support and collaboration through the U.S. Conference of Mayors and other national forums.

In reality, the servicing industry and cities share a common goal-to shield communities from blight brought on by vacant properties and protect them from damage and vandalism. As an industry, it is in our best interest to collaborate with cities and be a credible partner in helping them develop workable vacant property ordinances.



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.