HUD: Foreclosure Crisis Response with the Neighborhood Stabilization Program

A recent article published by the U.S. Department of Housing and Urban Development’s (HUD) online magazine, Edge, discussed a report released by HUD’s Office of Policy Development and Research (PD&R) concerning the Neighborhood Stabilization Program (NSP).

Foreclosure Crisis Response with the Neighborhood Stabilization Program

Congress created the Neighborhood Stabilization Program (NSP) in 2008 to counteract the negative consequences of the foreclosure crisis brought about by the housing market collapse. Administered by HUD and funded at $6.9 billion, NSP was implemented in three phases between 2008 and 2010. The second round of the program, NSP2, differed from the first round in that it instituted a competitive grant process and expanded eligibility for grants to nonprofit organizations in addition to state and local governments. In addition, NSP2 required grantees to determine target areas for concentrating funds based on HUD foreclosure distress risk scores. Eligible activities included financing, acquisition and rehabilitation, land banking, demolition, and redevelopment. In total, NSP2 directed $1.93 billion to 56 grantees in 133 counties and 29 states, covering 3,068 census tracts.

The overall goals of NSP were to slow the decline in home prices caused by foreclosures and reverse the negative spillover effects on surrounding neighborhoods. Researchers call this negative spillover a “contagion effect,” after the potential of foreclosures to spread throughout the neighborhood. Although research indicates that prices decline for properties surrounding a foreclosure, no consensus exists on the broader effects of foreclosures on other housing outcomes, such as vacancies, sales volume, financial distress, and whether homes are owner- or renter-occupied. Researchers are still debating the answers to some basic questions: How nearby does a foreclosure have to be for a negative effect to appear? How many foreclosed properties on a block are necessary to trigger a contagion effect? NSP2 provided an important opportunity to explore how concentrated investments can stabilize neighborhoods with high foreclosure rates.

Evaluation of the Neighborhood Stabilization Program

In February 2011, HUD commissioned research to evaluate the effects of NSP2. The resulting analysis covers NSP2’s three-year implementation, ending in February 2013, when all grant funds had to be spent. The study was to document how NSP2 grantees structured their programs, including how funds were invested in eligible activities, and to assess whether neighborhoods receiving NSP2 resources experienced positive benefits, such as rising home prices compared with census tracts not receiving NSP2 resources. In addition, the study investigated crime rates in financially distressed neighborhoods receiving NSP2 funding, and noted whether foreclosed properties showed signs of distress identifiable from the street.

Although the evaluation reports on all 56 grantees, the study focuses on 19 counties and 28 lead grantees based in various housing markets with significant levels of NSP activity. The research team used several quantitative and qualitative methods to investigate the program’s impact on the 6,354 properties receiving funding in the sample counties, including analysis of transaction records for millions of property foreclosures and sales in neighborhoods with and without NSP2 investments, interviews from two rounds of site visits with program grantees and partner organizations, and a Visual Tracking Survey of the exterior conditions of financially distressed and non-distressed properties that was performed three times over the course of a year. Due to limited resources, researchers conducted the Visual Tracking Survey only in Cuyahoga County, Ohio, and Palm Beach County, Florida.


Grantees varied in how they designed and implemented NSP2 across housing markets. Although this finding is not surprising given the considerable latitude that grantees had in designing their programs, these differing approaches to combating the foreclosure crisis were also influenced by local geography and economic performance in both the market boom of the 2000s and the recession later in the decade. Among the grantees in the study sample, acquisition and rehabilitation was the most common activity, accounting for 50 percent of all expenditures across the 19 counties. This activity was used most in Boom-Bust Sand States and Slow Growth markets, where it accounted for 50 percent and 85 percent of total program activity, respectively. Demolition, on the other hand, made up only 2 percent of total spending across the sample study, but was disproportionately focused on properties in the Lagging/Declining markets such as Cuyahoga County, Ohio (Cleveland) and Wayne County, Michigan (Detroit). In these markets, 77 percent of properties with NSP2 investments were demolished.

The grantees’ approach to implementation also evolved over the course of the program as they adapted their initial strategies to changing circumstances. Grantees shifted their focus from acquiring single-family properties to acquiring multifamily properties, as well as reallocating funds from acquisition and rehabilitation activity to redevelopment. Researchers point out that these modifications were likely caused by the program’s tight spending deadlines, as well as by increased competition from investors for foreclosed properties. Despite the scale of activities, researchers found little evidence that NSP2 investments created positive spillover effects in neighborhoods.

  • NSP2 did not systematically improve housing market outcomes for properties and census tracts where the program operated, relative to similarly distressed neighborhoods that did not receive NSP2 investments. While there is evidence that neighborhoods with program activities in Los Angeles County, California and Maricopa County, Arizona did see housing prices rise for properties near foreclosures, there was no sign of a consistent, positive spillover effect on housing outcomes across all counties. Moreover, some neighborhoods with intensive amounts of NSP2 funding, such as Philadelphia, experienced lower prices and higher vacancy rates than did other neighborhoods receiving less NSP2 funding. Researchers believe this finding of modest effectiveness is likely because the scale of the intervention was too small to successfully combat the housing crisis. The average census tract in the study, for example, contained 58 properties in financial distress and a total of 1,715 housing units — but only 7 properties actually received NSP2 funding. The study also concludes that, despite the program’s insistence on concentration, activities never achieved a sufficient level of concentration; the average distance between NSP2 properties in a typical census tract was 0.5 miles. The study does confirm previous research in finding that home prices declined for properties within 500 feet of a foreclosure sale.
  • In three cities, researchers analyzed the relationship between foreclosure and crime rates within distance rings of 250 and 433 feet surrounding a foreclosed property. The researchers found that NSP2 did not lead to a significant reduction of property or violent crime rates in Chicago or Denver, but there is evidence that the program contributed to a meaningful decrease in property and violent crime in Cleveland. Researchers found that demolition and land banking were responsible for the decrease in property crime in Cleveland, whereas rehabilitation and redevelopment led to a decrease in violent crime. One possible explanation for the positive results in Cleveland is that grantees explicitly chose neighborhoods for targeted investments based on crime rates.
  • The Visual Tracking Survey in Cuyahoga County, Ohio and Palm Beach County, Florida revealed that properties in financial distress present more signs of damage, disrepair, and blight than do properties not in that condition. These counties differed in important ways, however. In Cuyahoga County, the degree of visual blight was comparable on blocks with both high and low levels of foreclosure, whereas in Palm Beach County, observation of visual blight was higher on blocks with more financially distressed properties. Site teams also observed an overall reduction in the amount of visual blight in Palm Beach County between March 2012 and March 2013, but detected little decline in Cuyahoga County. Researchers credit this difference to the Florida county entering economic recovery.


Although NSP2 had a smaller overall impact on housing market outcomes in foreclosure-affected neighborhoods than many had hoped, it is important to consider that areas targeted for intervention were already significantly distressed before the program was implemented. In addition, the study design presents some limitations. The analysis period, which coincided with the program’s end date of February 2013, may have been too short to make conclusive determinations about NSP2’s long-term effects. Only 4,612 of the 6,354 properties rehabilitated with NSP2 funds were completed at the end of the observation period, meaning that there may be a lag between when program investments are complete (that is, when the properties are fully rehabilitated) and when market outcomes are observed. Despite this inconclusiveness, the study finds that NSP2 activities have the potential to spur future neighborhood revitalization, as grantees viewed program funding as a complement to their long-term strategies. Further research should examine conditions and outcomes in a smaller subset of census tracts for lessons and effective combinations of activities to pursue in those neighborhoods.

Please click here to view the article online.

Please click here to view The Evaluation of the Neighborhood Stabilization Program [pdf].

About Safeguard 
Safeguard Properties is the mortgage field services industry leader, preserving vacant and foreclosed properties across the U.S., Puerto Rico, Virgin Islands and Guam. Founded in 1990 by Robert Klein and headquartered in Cleveland, Ohio, Safeguard provides the highest quality service to our clients by leveraging innovative technologies and proactively developing industry best practices and quality control procedures. Consistent with Safeguard’s values and mission, we are an active supporter of hundreds of charitable efforts across the country. Annually, Safeguard gives back to communities in partnership with our employees, vendors and clients. We also are dedicated to working with community leaders and officials to eliminate blight and stabilize neighborhoods. Safeguard is dedicated to preserving today and protecting tomorrow.  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.



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.