Indiana Blight Bills Take Aim at Zombie Homes and Squatters

Legislation Update
January 19, 2016

Lawmakers from two of the state’s hardest-hit housing markets — Gary and Indianapolis — have introduced four bills this session targeting urban blight, but those hoping for a major overhaul of Indiana’s distressed property laws will have to wait at least another year.

The overarching message from the Statehouse: Cities need to use the tools they’ve been given before pushing for further reforms. That puts the onus squarely on the shoulders of Indianapolis Mayor Joe Hogsett to make progress on an issue on which he campaigned heavily.

Still, backers say the bills should help to some degree, as cities across the state continue to grapple with a tangled web of property rights, competing government interests and perverse market forces that have stymied efforts to combat blight since the onset of the housing crisis.

One would revive a battle over whether banks should have to clean up so-called zombie homes amid a foreclosure. Another would create “opportunity areas” in which city redevelopment commissions could take control of tax-delinquent, abandoned properties more quickly. The overarching goal in each bill: trying to get dilapidated properties into good hands faster, while making sure they don’t fall into further disrepair in the meantime.

The latest batch of reforms follows an IndyStar investigation that revealed how a convoluted government tax sale process has helped blight proliferate across the state in the wake of the housing crisis. IndyStar’s analysis found that Marion County property auctions with loose restrictions have drawn investors from 31 states and multiple countries. Often, buyers don’t rehab or even secure their houses, leaving neighbors with eyesores that invite crime.

Zombies, revisited

One bill from state Rep. Justin Moed, D-Indianapolis, seeks to loosen a provision added a year ago that prevents cities from regulating banks. That provision effectively pre-empted the city of Indianapolis from forcing banks to take care of vacant homes amid a foreclosure.

The provision was backed by the Indiana Mortgage Bankers Association, which argued that banks shouldn’t have to navigate a patchwork of municipal foreclosure laws across the state.

That’s fine, Moed says. But when an owner has vacated a home amid a foreclosure, he thinks the bank should have to take care of the property until it takes the deed. Stalled and slow-moving foreclosures make it difficult for Code Enforcement to abate nuisances, because the owners often can’t be found.

“At the end of the day, (the bank is) going to be the one that has the property,” Moed said. “But they can determine how long that process takes. It could be two years, four years” — and can sometimes stretch on indefinitely if the home isn’t worth much to the bank.

After the law was passed, the Indianapolis City-County Council passed an ordinance requiring banks to secure, mow and clean up properties after they issue a foreclosure notice. But it won’t be enforced unless the state law is changed to allow it.

Moed’s bill, House Bill 1239, was assigned to the Financial Institutions Committee, and it remains unclear whether the bill will get a hearing. In other states, banks have fought similar requirements, often taking their case to court, with mixed results.

Land banking lite

Of the bills offered this session, Senate Bill 310, co-sponsored by state Sens. Earline Rogers, D-Gary, and Rick Niemeyer, R-Lowell, could be the biggest stepping stone to broader reform.

It would allow a redevelopment commission to create “opportunity areas” in neighborhoods with pervasive tax delinquency and where at least one-third of homes are abandoned. The bill is designed to make it easier for cities to take control of vacant homes in such areas and would allow the redevelopment commissions to auction them off to “responsible” bidders.

Kathleen Taylor, policy director for the Indiana Association for Community Economic Development, a nonprofit that supports local efforts to fight blight, says the idea arose from Gary, “where they have blocks and blocks of vacant properties with no market value.”

The concept is similar to how land banking is used in other states, but on a more limited scale. By snatching up vacant properties in a specific area as they become tax delinquent, a redevelopment commission could stockpile enough to make a significant change in a neighborhood, perhaps by auctioning them off in bulk to a developer or demolishing them for public green space. Cities already can demolish condemned homes that are privately owned, but having them under city control makes it easier to leverage state and federal dollars for larger redevelopment projects.

A major barrier today is that cities and redevelopment groups have a hard time getting control of tax-delinquent properties in a timely manner, because homeowners need a fair chance to pay off their taxes and keep their homes.

“You want to act in good faith and make sure that residents’ rights are protected, but a lot of these properties are sitting vacant,” Taylor said. “The owner will never step forward. And there’s no solution.”

Tax sale tweaks

Another bill, sponsored by Sen. Jim Merritt, R-Indianapolis, would further adjust the windfalls that tax lien investors can receive when they buy homes that the owner is going to redeem.

Today, homeowners are given a year after the tax sale to pay off the back taxes owed and keep their homes. Lien buyers are owed the back taxes, plus a penalty of up to 15 percent on the taxes owed. Investors who bid more than the value of the taxes also accrue 5 percent interest on the overbid. For instance, if the taxes are $5,000, and a bidder spends $6,000, the homeowner would owe an additional 5 percent interest penalty on the $1,000 difference.

Merritt’s bill, Senate Bill 204, would change the overbid interest to the amount the state pays each year on income tax refunds, which is determined by market rates. For 2015, that was 3 percent, but it has been as high as 9 percent in the past decade.

In the past, counties have pushed back against reductions in the interest rate, because they worry that the market will dry up and local revenues will drop.

Merritt’s bill would be a minor adjustment compared with a 2014 bill, which cut the overbid interest in half. “I don’t want anybody buying a home (at tax sale) thinking they’re going to make a windfall,” Merritt said.

His bill also would make it easier for police to evict squatters. Today, police efforts are often hampered because if they can’t find the owner of a vacant home, they can’t prove a squatter doesn’t live there. The new language would consider it criminal trespassing if people don’t leave a vacant home when they’ve been ordered to do so by police.

The initial draft of the bill also brings back a controversial provision from a year ago that would have eliminated mortgage settlement conferences. But that will be a fight for another year. Merritt said the provision on settlement conferences is coming out of the proposal because it lacked support in the Civil Law Committee, where the bill has been assigned.

House Bill 1124 from Rep. Cherrish Pryor, D-Indianapolis, would try to make it easier for tax sale buyers to take care of abandoned homes during a yearlong limbo period in which the homeowner has a chance to pay off the back taxes.

That limbo period has long been blamed by cities and community development groups for allowing abandoned homes to fall further into disrepair. In many cases, the prior owner is gone, but it’s risky for the buyer to spend any money on upkeep, because the homeowner could come in, pay off the taxes and keep the home without reimbursing the costs of maintenance.

Pryor’s bill would allow tax sale buyers to put liens on the home to recoup the costs of cutting the grass, boarding up the home or doing other exterior upkeep. Her bill would apply only to vacant and abandoned homes.

More needed?

State and local officials agree that more needs to be done on the issue, but there remains disagreement over how much further lawmakers should go. Some want a dedicated funding source for land banking. Others want a complete overhaul of the tax sale system.

But advocates for a blight fix at the Statehouse, such as Merritt and Moed, want to see how cities use tools that they already have, such as receivership, before more changes are discussed. And, with 2016 being a short session, comprehensive reforms may have been a nonstarter, anyway.

Said Moed, “it’s hard to keep coming back to the Statehouse and for us to keep coming up with ideas if the city’s not going to take advantage of them.”

Jeff Bennett, Indy’s new deputy mayor of community development, says the administration plans to do just that. The city is moving ahead with receivership and could approve a nonprofit to manage the program as early as this week. Meanwhile, he’s working to put together a comprehensive strategy for how to use the rest of the tools the city has available.

Part of that, he hopes, will include a better working relationship with the Marion County Commissioners. He also wants to look at expanding the role of Renew Indianapolis and to evaluate whether the city needs to devote more resources to fighting blight.

Bennett expects to have a full strategic plan complete by the spring at the latest.


Additional Resources:

IN HB 1239 (bill info/text)

IN SB 310 Info (bill info/text)

IN SB 204 Info (bill info/text)

IN HB 1124 Info (bill info/text)



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.