How These Hurricane-Ravaged States Have Avoided a Housing Disaster — So Far

Industry Update
April 22, 2018

Source: CNN

After Hurricane Harvey soaked Houston with 51 inches of rain last August, Amir Befroui, a foreclosure defense specialist at Lone Star Legal Aid, started planning for a very busy spring.

That’s when the 90- and 180-day break on payments that mortgage companies typically give homeowners who have been hit by unexpected events like natural disasters would start to run out.

But so far, few hurricane-related foreclosure cases have been coming across his desk.

“We are starting to see a trickle,” Befroui says. “I suspect it’s going to be a gradual increase. I don’t think it’s going to be a tidal wave like the one that happened after Ike.”

According to real estate analytics firm Attom Data Solutions, foreclosure starts in hurricane-affected areas of Texas and Florida rose in the first quarter of 2018, but still remained below pre-hurricane levels.

In Houston, for example, foreclosure starts had been slightly elevated due to the oil price crash of 2015 and 2016. Not counting a dip at the end of 2017, the first quarter was as low as it’s been in more than 12 years, with 1,184 foreclosure starts. That’s a big difference from Hurricane Ike in late 2008, where the storm exacerbated a mounting economic crisis that spurred 7,280 foreclosure starts in just one quarter.

Even more encouraging, the number of people seriously delinquent on their loans in hurricane-affected areas of Texas and Florida continued to sink after spiking over the winter. Thousands of people were able to bring their mortgages current again after taking advantage of post-storm forbearances from their lenders.

Given how damaging foreclosures can be for property values, credit scores and community stability, it appears the Gulf Coast has managed to dodge a potential hurricane housing disaster. At least, so far.

Part of that is due to coordinated efforts by industry groups and consumer advocates who helped create better options for homeowners to modify their loans after the break on mortgage payments ends. But more importantly, reforms to mortgage policies following the financial crisis had already fostered a healthier housing market to begin with.

Homeowners went into last year’s disasters in a better place financially than they were during Hurricanes Ike, which hit in 2008, Sandy in 2012, and even Katrina in 2005. The irresponsible lending practices of the late 1990s and 2000s had largely been ended by the Dodd-Frank Act and the Consumer Financial Protection Bureau, which raised standards for mortgage underwriting and implemented protections for borrowers facing foreclosure.

“People who’ve gotten mortgages post-CFPB, they don’t have loans for the most part that economically they could never have afforded,” says Ira Rheingold, executive director of the National Association of Consumer Advocates.

Across the United States, the number of properties in active foreclosure fell in March to the lowest level since late 2006, according to the real estate data firm Black Knight.

But in the case of natural disasters, programs aimed at helping distressed homeowners aren’t always helpful enough. Mortgage modification programs administered by Fannie Mae, Freddie Mac, Ginnie Mae, the Veterans Administration, and the Federal Housing Administration — which now back about 70% of the U.S. housing market — require lots of documentation that’s hard to pull together if your home is literally underwater.

Homeowners were snarled in endless paperwork after Hurricane Sandy hit in 2012, with each government housing agency requiring different policies and homeowners owing balloon payments that came due immediately once the forbearance period ended.

So as the 2017 hurricane season got started in earnest, D.C.’s housing finance wonks came to government agencies with one fundamental ask: Design a uniform option that can give homeowners a break on their mortgages without getting them in trouble when the bills come due.

“We were unsuccessful during Sandy,” says Meg Burns, a former Department of Housing and Urban Development official who now heads housing policy at the Financial Services Roundtable, which represents lenders and servicers. “That’s what informed our thinking to get all of the government entities around the table to make some consistent policy.”

Along with automatic forbearances for homeowners in hurricane-affected areas, Fannie, Freddie and the FHA came up with an option that allows borrowers to make the payments they skipped during the months after the disaster at the very end of the loan — without going through a modification that could force them to take on a higher interest rate.

“It’s a different world now,” says Sara Singhas, associate regulatory counsel at the Mortgage Bankers Association, referring to the recent departure from rock-bottom interest rates. “Especially for people who are performing on their loans, we wanted to make sure we don’t put them into a worse financial position than they were prior to the disaster.”

These provisions, however, are only temporary and will sunset if they aren’t renewed. “I would feel a lot better if they codified what we did,” says Peter Muriungi, head of mortgage servicing for Chase Bank, which had 450,000 customers affected by the 2017 storms.

On the ground, housing counselors say that lenders have been more willing to work with people who can prove they have been a victim of a hurricane. That kind of patience is not typically afforded to people facing foreclosure for economic reasons, such as spiking property taxes, which have become more of a problem in the Houston area in recent years.

“The large national servicers, once they get it into their head that this is a Harvey case, then it gets moved over to the disaster recovery center rather than the traditional foreclosure side,” says Sherrie Young, executive director of the Credit Coalition in Houston.

But not everybody takes action in time to receive that kind of assistance, and not everybody qualifies when they do. For those who lost jobs as a consequence of the hurricanes or were already behind on their payments before disaster struck, options start to narrow.

That’s why thousands of people are still facing the prospect of losing their homes, and many more could run into that situation as banks lose patience in the coming months. Aid groups worry about the people who haven’t yet asked for help.

“I think the biggest problem lies with the folks who don’t reach out,” says Glenda Kizzee, a housing counselor at the Houston Area Urban League. “They’re going to utilize whatever resources they have to rebuild the home, and sometimes miss the payment on the home, which is just going to make it worse. By that time, our resources are limited in what we can do.”

The biggest headaches, counselors say, arise with smaller servicers that have fewer resources to work with homeowners in trouble.

Take Maurine Howard, whose stately home near Addicks and Barker reservoirs in Houston was inundated when the Army Corps of Engineers released the floodgates in order to avoid a breach. She paid off the three months of mortgage payments after her forbearance ended, but the mortgage company still bumped up her monthly payment from about $1,350 to $1,700.

Months of phone calls, she says, still haven’t managed to fix the problem, while she racks up credit card debt to make fixes on the house.

“Through the process of Harvey, dealing with the mortgage company has been a nightmare,” Howard says, amid stacks of paper laid out on a bed in one of the few undamaged rooms of the house. “It’s never ending. You take two steps forward and five steps back.”



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.