Judicial States Struggle with Foreclosure Backlog

On February 25, MBA NewsLink published an article titled ‘Judicial’ States Struggle with Foreclosure Backlog.

‘Judicial’ States Struggle with Foreclosure Backlog

ORLANDO, Fla.–It’s a given: if a borrower goes into foreclosure in a “judicial” state, expect a long, ungainly process.

The Mortgage Bankers Association’s 4th Quarter 2013 National Delinquency Survey released last week showed states with judicial foreclosure processes (which involve extra steps through the state’s court system) still account for most loans in foreclosure. The NDS said of the 17 states that had a higher foreclosure inventory rate than the national average, 15 were judicial states. And while the percentage of loans in foreclosure dropped in both judicial and non-judicial states, the average rate for judicial states was 4.92 percent compared to the average rate of 1.52 percent for non-judicial states.

Caren Jacobs Castle, attorney with The Castle Law Group, Denver, said here at the recent MBA National Mortgage Servicing Conference & Expo that judicial delays in the foreclosure process, while well-intentioned, continue to keep thousands of borrowers and servicers in limbo, despite the courts’ working their way through resulting “bubbles.”

But in some of those states, sentiment appears to favor moving the process forward, particularly in New York, New Jersey and Florida, which have the highest number of foreclosures and make up nearly half (with Nevada) of all foreclosures in the U.S.

Rosemarie Diamond, managing partner with Phelan Hallinan & Diamond LLP, Philadelphia, said New Jersey represents a case study of the judicial process. In response to concerns raised in 2010, the state courts took a more active role in the process to ensure transparency–slowing the process down to perform longer reviews.

Diamond said many of these concerns have been resolved; in the second half of 2013, the courts reactivated a rule that allows them to dismiss cases perceived as “inactive,” issuing notices on more than 90,000 cases it still showed as being on the record demanding to know why these cases were still pending.

“This rule is going to be part of our ‘new normal’ and can affect whatever negotiations you have with a borrower,” Diamond said. “The rule ensures that the courts are not wasting resources. While this has sped up the process, it has also created confusion among some borrowers, who don’t understand why their cases have been dismissed.”

As the industry moves forward, New Jersey courts have been given only a finite amount of resources by the state, which affects their ability to manage the process. “Going forward, the state has allowed for electronic filing to streamline the process–which it has–but we now also have a significant number of loans that have to be addressed through the judicial process,” Diamond said. “This is resulting in a strain in court resources.”

Another statute expedites the process to close out abandoned and vacant properties, which Diamond said represents a very positive step. “For servicers and the community at large, and even for borrowers who have decided to move on with their lives, this is a very useful resource,” she said.

Daniel Consuegra, managing partner with the Law Offices of Daniel Consuegra, Tampa, Fla., said Florida continues to be the epicenter of foreclosure activity, with the highest rate of foreclosures in the country. He said backlogs as a result of the judicial process have pushed the process to more than two years in some cases.

A new foreclosure law in Florida, in effect since July, temporarily slowed the process even further, but he said the process has accelerated since then. “There is some movement to accelerating the process,” Consuegra said. “But there are statutes of limitations; and if it runs out, you have to start all over again, which drags out the process even longer.”

Susan West, senior associate of foreclosure with Rosicki, Rosicki & Associates, Plainview, N.Y., said New York faces similar issues to other foreclosure states, bogged down by the sheer numbers of foreclosures and the length of the process, one of the longest in the nation.

West said the state is experimenting in some cases with “bulk trials,” in which a representative from a single servicer provides testimony on numerous cases on the docket. She said in some cases, this cuts the foreclosure timeline by half. But other issues continue to drag the process.

“We’re still seeing loss mitigation as a major factor in the timeline,” West said. “We have 62 counties, all of which handle loss mitigation differently. It can be a real challenge.”

Consuegra said Florida has also used bulk trials as a means of cleaning up the process, setting up thousands of trials. Unfortunately, the trials required servicers to be in many places at the same time. “While it has reduced the backlog, it’s been very problematic logistically,” he said. “It’s required servicers’ witnesses to be well-prepared and servicers’ attorneys to be well-trained. They are up against sophisticated law firms with plenty of resources.”

Richard Rothfuss, president and CEO of Lerner Sampson and Rothfuss, Covington, Ky., said Ohio–and in particular, Cuyahoga County (Cleveland)–presents unique challenges. He said new legislative proposals and regulatory proposals appear to be more dialed in to resolving the foreclosure process more quickly and efficiently, although few have emerged from the legislative process. Rothfuss said part of the issue in Ohio, as well as other states, is that the foreclosure process is dependent on a public documentation system with limited resources.

“There’s nothing truly overwhelming right now,” Rothfuss said, “but neither are things changing quickly. There needs to be a flow to the process; what we’re seeing in Ohio and Kentucky is a lot of fits and starts.”
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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: www.safeguardproperties.com.



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.