FHFA Statement of Alfred M. Pollard

Investor Update
October 27, 2015

“Vacant and Abandoned Properties in Relation to Foreclosure Proceedings Joint Roundtable Discussion”

Chairman Wagner, Chairman Petri, Members of the Committees, thank you for the opportunity to meet with you today to discuss a significant topic to all who care about housing and about the status of our neighborhoods not only here in Pennsylvania but across the country.  I serve as General Counsel for the Federal Housing Finance Agency (FHFA).  FHFA oversees, as regulator, the eleven Federal Home Loan Banks, including the Pittsburgh Bank, and Fannie Mae and Freddie Mac. 

At the same time as being a regulator, the Agency acts as conservator for Fannie Mae and Freddie Mac.  The conservatorships involve more direct involvement in the affairs of these regulated entities   and a $187 billion investment by the government and, therefore, taxpayers.  That investment has permitted these firms to meet their mission of providing a liquid and stable housing finance system.  At the same time, the conservator is charged with preserving and conserving Enterprise assets.  The conservatorships of these congressionally-chartered entities also entail certain additional legal responsibilities and authorities for the Agency.

Due to their more direct relationship to the purchasing and securitizing of home mortgages, my comments focus on Fannie Mae and Freddie Mac.

Foreclosure Avoidance

Before addressing vacant and abandoned properties in relation to foreclosure proceedings, I must let you know that avoiding foreclosure is the first priority of the Federal Housing Finance Agency.  Keeping homeowners in their homes is the best way to maintain stability in communities, avoid losses to the regulated entities and produces a long term benefit to neighborhoods.

Loan Modifications.     The Enterprises have been part of over 5 million special loan modifications.  They serve as the agents for implementing the Treasury Department Home Affordable Modification Program (HAMP) and have their own Home Affordable Refinance Program (HARP).  Through these programs, homeowners have been able to lower their monthly costs and remain in their homes.  Earlier this year FHFA Director Watt announced that these programs, due to expire in 2015, have been extended through 2016 and many homeowners can and should take advantage of them.

Diversity and Inclusion.     In the area of sales of non-performing loans, Director Watt has stated that the Enterprises are now making efforts to get minority-, women- and disabled-owned businesses and non-profit organizations involved in their non-performing loan (NPL) sales.  These sales provide a means for the Enterprises to sell severely delinquent loans to new buyers using new servicers who will work aggressively with borrowers to help them avoid foreclosure.  Conducting the right kind of outreach to entities that will maximize borrower engagement and neighborhood-based solutions is a critical component of successfully executing these sales in ways that will help keep more borrowers in their homes and help stabilize neighborhoods.  Information on this program is on the Enterprise websites.

Affordable Rental Housing.     Another tool that assists in foreclosure avoidance and benefits neighborhoods is support for affordable rental housing.  Director Watt recently summarized a key issue—expanding access to credit and, at the same time, seeking to continue providing liquidity in the multifamily market and especially for support of affordable rental housing.  Households across the country are paying more of their income for rent, with half of all renters spending more than 30 percent of their income on housing and 26 percent of renters expending more than 50 percent.  The Enterprises offer affordable, long-term, fixed-rate loans that enable property owners to have a stable, sustainable mortgage payment and reduce the need to increase rents charged to tenants; over 70 percent of rental units financed by the Enterprises over the last few years have been affordable to low-income households.  All of this has been accomplished with strong underwriting standards and correspondingly strong performance, which they sustained throughout the economic crisis.  In other words, helping property owners and having good underwriting standards puts renters as well as homeowners in the most sustainable position.

To further this effort, Director Watt has created exclusions to the FHFA cap on Enterprise multifamily purchases.  The cap will not apply to loans for affordable properties, including those in higher-cost areas, and excludes certain loans for manufactured housing communities as well as seniors housing and small multifamily properties affordable to low-income tenants.  Further exclusions are anticipated.

Vacant and Abandoned Properties

Vacant and abandoned properties clearly remain problems for many communities, large and small.  FHFA has heard from some of the largest cities as well as from smaller municipalities of the pressures they feel.  It should be noted that not all vacant or abandoned properties are in the hands of the private sector.  You may have seen reports that cities such as Chicago and Baltimore hold double digit thousands of properties and many vacant lots.  As such, this issue confronts both governments and the private sector.

Note on NSI.     Briefly I will mention a project that is addressing some of the issues that involve vacant or abandoned properties.  Last year Director Watt announced the Neighborhood Stabilization Initiative.  This is a pilot program designed to stabilize neighborhoods that have been hardest hit by the housing downturn.  It was jointly developed by FHFA, Fannie Mae and Freddie Mac and includes strategies for helping delinquent borrowers avoid foreclosure and strategies for disposing of the inventory of real estate owned (REO) properties held by Fannie Mae and Freddie Mac.  The number of REO properties owned by Fannie Mae and Freddie Mac is declining, however, in some areas of the country REO inventory continues to increase or remain near historic highs.  Certain markets have large concentrations of distressed and low-value REO properties as well as large volumes of loans that have been delinquent for one to two years that are likely to become REO. 

Given the unique challenges presented by these markets—high vacancy rates, weak for-sale markets, steep home-price declines—Fannie Mae and Freddie Mac are partnering with the National Community Stabilization Trust, a national non-profit organization experienced in stabilization efforts for distressed communities.  Working together, they will leverage their ties to “boots on the ground” community organizations and local non-profits and work closely with local governments to make timely and informed decisions about the best treatment of individual properties.  These may include sales to nonprofits, rehabilitation of homes, loan modifications and, in some instances, demolitions.

As to vacant and abandoned residences in general, there are two elements to addressing these properties—maintaining them and moving them to sale.

Property Maintenance.     Fannie Mae and Freddie Mac have formal property maintenance programs and these are administered by their servicers normally through full time property maintenance companies.  It should be noted that lenders and mortgagees are in different legal positions before and after they assume title to a property.  The Enterprises set national standards and there are required reviews of service provider performance.  Key elements of property maintenance include training for property maintenance vendors, seeking to find homeowners, conducting inspections, securing and stabilizing a home, keeping trash removed and lawns cut and undertaking random inspections to assure that standards are being met.  Standards are available on Enterprise websites.?

Property Sale or Disposal.     In many instances, homeowners may remain in their homes as Freddie Mac and Fannie Mae focus on selling their portfolio of vacant homes to owner occupants to promote community stabilization.  Their respective First Look Programs allow an exclusive time period at initial listing of a home where owner occupants and nonprofits can submit offers without competition from investors.  If a homeowner cannot remain in a home, then it is in the interest of the homeowner to exit in an appropriate manner.  This can be through a short sale, deed in lieu, cash for keys or other transaction.  Also, it is in the interest of local governments and of neighbors to see a property returned to productive use and occupancy, particularly if the homeowner has vacated or abandoned their home.  To return these homes to productive use and occupancy as quickly as possible, I highlight the following considerations for you regarding the treatment of vacant or abandoned properties:

1. Accelerated Foreclosure of Vacant or Abandoned Properties

Several states have enacted laws that abbreviate what can be very long foreclosure timelines to permit faster movement to foreclosures if a property is vacant or abandoned.  Timelines can be as short as 45 days.  Included in these laws are safeguards or safe harbors that protect city officials or private parties from taking an action based on certain factors that may later be reversed.  It is significant, therefore, that a government official indicate that a residence has been determined to be vacant or abandoned pursuant to a published checklist.  Such a statute should assure as well that any review or final approval of the accelerated foreclosure is also timely and not put through a process—judicial or otherwise— that vitiates the benefits of an accelerated foreclosure law.

2. Streamlined Rules

Another approach is to streamline rules for dealing with vacant or abandoned properties.  Municipalities and counties can be authorized to accelerate permitting and other procedures to deal with such properties.  For example, in many instances demolition is an appropriate action for certain properties.  In such cases, local authorities should act to provide early inspections, quick approvals and determine if any other normal procedures can be abbreviated to facilitate a properly conducted demolition.  Other rules affecting vacant and abandoned properties may be considered appropriate for waivers or faster approvals as well.

3. ?Neighborhood-Based Programs

Where possible, municipalities can focus on neighborhood approaches that include helping homeowners remain in their homes while addressing vacant or abandoned properties that exist in their neighborhoods.  Putting together a plan for outreach to community organizations, to local government agencies and to all affected lenders could result in a comprehensive approach and a beneficial outcome.  Addressing as many units as possible should provide a better outcome.  This, as I noted earlier, is the direction of the Neighborhood Stabilization Initiative.


While much of what I have noted above suggests action by localities, it should be accompanied by appropriate uniformity.  A roadmap for certain actions makes it much easier for lenders and localities to proceed.  Because all 67 Pennsylvania counties regulate the foreclosure process independently, the state may wish to consider areas where uniformity could be achieved— vacant and abandoned properties would seem to fit well within that framework in line with the ideas above.

5. Vacant Property Registration

For mortgagees, the relationship to vacant properties is at times a difficult one.  The party moving for a foreclosure is not the owner of the property and does not have the rights of an owner.  So even for a vacant property, there could be problems such as trespass allegations or other liability.

In Pennsylvania the foreclosure timeline of 810 days creates significant losses for lenders who are not being paid on their mortgage, but cannot act to sell the property.  At the same time, counties have sought to require registration and property maintenance standards.  In some cases the fees charged are so high that they represent taxes, not fees and, for Fannie Mae and Freddie Mac, they do not pay such taxes.  Further, as noted, for property maintenance, Fannie Mae and Freddie Mac have national programs that benefit local communities and their property maintenance standards are national in scope.

I hope this information has been helpful and I am happy to answer any questions you may have.?

Corinne Russell (202) 649-3032 / Stefanie Johnson (202) 649-3030???

Source: FHFA



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.