Four Predictions About Future Housing Finance Reform

On September 26, National Mortgage News published an article titled Four Predictions About the Future of Housing Finance Reform.

Four Predictions About the Future of Housing Finance Reform

Forecasting the future of Fannie Mae and Freddie Mac is always a tricky business. Just ask the firms’ former executives, who in 2007 still thought the companies were invulnerable.

Yet certain conclusions can already be drawn about the effort to unwind the two government-sponsored enterprises and set up an entirely new housing finance system, including whether it will include a controversial government guarantee.

Following are key predictions on how the debate is likely to play out:

1. A final bill will include a government backstop
Although House Financial Services Committee chairman Jeb Hensarling is still pushing a reform bill to end the government’s significant role in the housing market, he is having difficulty getting it through the Republican-controlled chamber. Housing groups are aggressively lobbying members, and many lawmakers are unwilling to vote in opposition to a government guarantee when the Senate and President Obama are insisting that a guarantee be part of a final bill.

It has become clear therefore that the eventual bill coming out of the House will likely resemble the bipartisan Senate legislation sponsored by Sens. Bob Corker, R-Tenn. and Mark Warner, D-Va. That bill includes a government backstop in the event of catastrophic losses.

The House bill “will be something that moves somewhat in the direction of” the Corker-Warner legislation, Corker told attendees this week at SourceMedia’s Mortgage Regulatory Symposium.

He was seconded by a panel of experts, who said any final bill would keep the government in the housing market.

Assuming “something will pass…it will have a secondary government guarantee,” said Phillip L. Swagel, a former Treasury official in the Bush administration who is now a professor at University of Maryland School of Public Policy. “I think everybody understands that.”

2. Corker-Warner’s proposed 10% equity threshold will come down
One of the most important provisions of the Corker-Warner bill is a requirement that private investors take a 10% first loss position for any loan or security that is backed by the proposed Federal Mortgage Insurance Corp.

The figure is already a lynchpin of debate, with housing and industry groups arguing it should be substantially lower.

Corker signaled on Tuesday that he will fight efforts to weaken it.

“I think it’s very unlikely to come down,” Corker said. “I’ve actually been pretty heartened by the fact that even the more progressive members…of the Senate Banking Committee have seen this 10% as important.”

Speaking to the crowd of bankers and mortgage lenders, he added: “I know that many of you are going to try to dwindle this down. I know there are a lot of people who support this bill but want to see capital reduced. I hope all of you are very unsuccessful and we keep it as it is.”

Yet many observers predict that the number will inevitably come down amid pressure from many of the same groups that are giving Hensarling trouble on the House side.

“The 10% sounds really good to get a lot of the Republicans and some of the fiscal conservative people in line here, but the 10% capital we think is going to be adjusted down,” said Paul Miller, a managing partner with FBR Capital Markets. “The actual equity would be much lower, in the 3%-5% level.”

But others said conservatives will resist a dramatic decline.

“We’ve only really seen Corker just start to reach out to the more conservative members of the Senate Banking Committee,” said Mark Calabria, head of financial regulation studies at the Cato Institute. “And they see 10% as a floor.”

Still, Calabria acknowledged it would likely be reduced by the time it cleared both houses of Congress.

“I believe it will be ultimately less than 10% that comes out,” he said.

3. Affordable housing remains an obstacle
Consumer groups are already angry over both GSE bills’ treatment of affordable housing. While the House bill largely avoids the issue, the Senate bill would create the Market Access Fund, an office within the Department of Housing and Urban Development designed to promote rental housing and assist low-income and underserved areas.

Yet the Senate provision is a far cry from the contentious affordable housing goals that Fannie and Freddie once had to comply with and that many conservatives say caused, or at least contributed to, the financial crisis. It is also distant from the affordable housing trust fund created as part of the 2008 bill that established the Federal Housing Finance Agency. That trust fund would have used profits from Fannie and Freddie to fund affordable housing projects. The GSEs failed before any such funds were deposited.

Many see growing pressure on Senate Democrats to strengthen the affordable housing provisions of the Corker-Warner bill. Yet GOP members are likely to protest any such measures.

“It will be a big difficulty,” said Swagel. “It will be a very hard. On the right, they will want that as low as possible…It’s going to be a big obstacle getting that done.”

Calabria said that while Hensarling may be willing to give some ground on a government guarantee, he might take a hard stance in opposing affordable housing provisions.

“It’s important to keep in mind that it doesn’t get out of conference without Hensarling’s support,” he said. “Ultimately, you have to make some choices. One way Hensarling will be able to declare victory is to push back on housing goals and a housing fund.”

4. The longer GSE reform takes, the harder it gets
Lawmakers are in a very tight spot when it comes to enacting GSE reform. The battles over the budget and debt ceiling are still raging, making it extremely difficult to pass a housing finance reform package this year.

Yet next year, the political environment doesn’t significantly improve, with a small window of opportunity before lawmakers become consumed with their next election. While the 2014 midterm elections could hand Republicans control of the Senate, any final piece of legislation would still have to be bipartisan to have any chance of enactment.

More importantly, the politics of the issue become more challenging as Fannie and Freddie continue to make money–and are handing over those profits to the government.

“It gets more and more difficult,” Corker said. “People look at the GSEs and say, ‘Look how profitable they are.'”

As Fannie and Freddie make more money, the desire to upend the status quo could rapidly fade. That makes it more likely that the government permanently nationalizes the two GSEs.

“If nothing’s done, eventually the profits, whatever they are, will be spent and the firms will become part of the government forever,” said Swagel. “I think that’s the worst outcome of all.”

To view the online article, please click here.

About Safeguard 
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders,  and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally. Website:



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.



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”.


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.


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, 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.


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.


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.