Klein Examines Role of Politicians in Housing Recovery

On November 12, Servicing Management published an article by Safeguard Properties Founder and Chairman, Robert Klein, entitled On The Street Where The Politicians Live.
 
Now that the 2012 election is history, it is time for state-and local-level elected officials to work with servicers on long-simmering housing problems.

By the time this article is published, states and local governments will have elected 13 governors, hundreds of state representatives, and countless mayors, city managers, members of council, aldermen and other local officials. No matter who wins, one thing every elected official will acknowledge is the importance of a housing market recovery on his or her respective levels of government.

The mortgage servicing industry has an important role as well: to work with state and local government leaders to build consensus around legislation and regulation that will support a housing recovery. From a mortgage field services perspective, a critical focus must be to reduce the number of vacant and abandoned properties in our communities.

There are four ways to accomplish this goal: keep troubled borrowers in their homes, accelerate the foreclosure process for vacant and abandoned properties, repair and rehabilitate properties that are viable, or demolish uninhabitable properties that are too damaged to repair or rebuild.

There has been good news on the housing front. In August, the S&P/Case- Shiller Index showed that U.S. home prices have begun to stabilize after six years of decline. The Mortgage Bankers Association reported that delinquency rates were lower in the second quarter of this year, compared to the same period in 2011. The U.S. Department of Labor reported that unemployment had dropped to 7.8% in September, its lowest level in nearly four years.

The cautionary news is that improvements are occurring slowly. Even though the unemployment rate has fallen, many workers remain underemployed, and nearly one-quarter of mortgages remain underwater. An October Wall Street Journal article estimated that approximately 14 million homes across the country are vacant, and that no market interest exists for nearly four million properties that are deteriorating, attracting criminal activity and dragging down surrounding property values.

We need to build on the positive momentum and work at the state and local levels to protect the value and integrity of our existing housing stock, as well as support the revitalization of urban neighborhoods that have been hit the hardest by the housing downturn.

State of the states

Two areas in which state legislatures can have a positive impact on protecting and preserving properties are enacting statewide vacant property registries and accelerating vacant properties for foreclosure.

Today, more than 800 municipalities across the country have enacted individual vacant property registration (VPR) ordinances to help assure that vacant and foreclosed properties are maintained to community standards. The requirements for each municipality vary significantly. As more cities create ordinances, the more challenging it becomes for mortgage servicers to comply, and the more burdensome it is for municipalities to monitor non-compliance and take enforcement action.
 
Recognizing these challenges, several states have enacted statewide registries or guidelines that help to create uniform standards to assist municipalities and servicers alike, and to facilitate more effective communication between them to better protect vacant and foreclosed properties. For example, Maryland created a statewide ordinance and Georgia established statewide guidelines for local governments to follow. Connecticut, Illinois and New Jersey created a set of statewide regulations that parties responsible for vacant properties must comply with.

By creating uniform standards, states recognize the need to facilitate critical partnerships between local governments and mortgage servicers, and pursue the goal they share to protect and maintain vacant properties. The more uniform the standards, the more effectively mortgage servicers can comply. As an industry, we should encourage every state legislature to move in this direction.

Another critical initiative at the state level is the acceleration of vacant and abandoned properties to foreclosure. Because each state establishes its own foreclosure statutes, the time frame for foreclosure proceedings can vary from a few months in non-judicial states, where foreclosures do not require the intervention of the courts, to as long as two years in judicial states in which foreclosures are processed through the court systems.

In foreclosure proceedings, states currently do not distinguish between occupied properties and those that have been abandoned by their owners. That distinction is important. If a property is occupied, a longer foreclosure timeline serves to protect the rights of the homeowner to due process. If the property is abandoned, a lengthy foreclosure process simply leaves a property vacant for a longer time period and more vulnerable to damage.

The strongest argument against accelerated foreclosure has been on the basis of homeowner protection. Ironically, when a property is abandoned, there is no homeowner to protect. But a drawn out foreclosure process for a vacant property actually does harm homeowners – those whose homes surround vacant and abandoned properties.

Even if a vacant property receives regular inspections and maintenance, the longer it sits vacant, the more it will deteriorate. Vacant homes attract vandals and squatters, become neighborhood nuisances, and negatively impact home values and the quality of life of the neighborhood.

Colorado, New Jersey, Florida, Ohio and Maryland are among the states that either have considered or are considering legislation that accelerates vacant and abandoned properties for foreclosure. This is one of the most important pieces of legislation for state legislatures, especially those in judicial states, to consider in order to protect the value and quality of vacant homes. The sooner a vacant property can be sold to a responsible buyer, the better it is for everyone, as it protects both property values and tax values and prevents all the problems that come when a vacant property falls into decline.

Local government initiatives

Ultimately, vacant and abandoned properties place the greatest strain on local communities. As the numbers of vacant properties and their associated challenges have increased, so have the numbers of local vacant property ordinances and other efforts to address them.

Mortgage servicers have relied increasingly on their field service partners to engage local government officials in dialogue to address common issues. In regard to vacant property ordinances – where there is often no state legislation to guide municipalities – field service compa-nies have offered a “boots on the ground” perspective to help ensure that any local ordinances will meet their desired results and reduce unintended consequences.

Ultimately, municipal leaders must begin to recognize that vacant property ordinances by themselves will not lead to a housing recovery. At best, they are a short-term solution to help cities cope with the fallout of the housing crisis.

To revitalize their communities, city officials must take the lead to develop a holistic plan that includes working with their state legislatures to accelerate the foreclosure process for vacant and abandoned properties. Also, a revitalization plan should encompass the demolition of uninhabitable properties, assistance for troubled borrowers to prevent future foreclosures and private sector partnerships to rehabilitate salvageable homes.

The first step must be the demolition of blighted properties. These are not properties that anyone will invest in. They are nuisances and eyesores that have been stripped of any value, and they become sites for illegal drug activity and other criminal behavior, including violent acts against children and adults. They make neighborhoods undesirable places to live in and discourage business growth. The financial impact on communities in lost tax revenues and the burden on city budgets for police, fire and other services is almost impossible to quantify.

Tearing these properties down is the only way to begin to stabilize the value of surrounding properties, attract prospective home buyers and begin to revitalize neighborhoods. Cities that were hit hard by the housing crisis have invested in the demolition of nuisance and uninhabitable properties as their budgets have allowed, but the need far exceeds their resources. Until these properties can be torn down – which could take years – they will perpetuate more blight.

Earlier this year, Rep. Steven LaTourette (R-Ohio), along with a bipartisan delegation from Ohio and Michigan, introduced legislation that would provide up to $4 billion in demolition funding for the most devastated communities across the country through the issuance of government bonds. The legislation, called the Restore Our Neighborhoods Act, has been held up in committee since March. It is a creative solution that deserves serious consideration.

Another creative approach to assist communities to holistically manage low-value assets is the creation and uti¬lization of land banks. By donating low-value assets to land banks, mortgage companies remove low-value properties from their books, along with the associ¬ated costs of maintenance, taxes, liens and other expenses.

Once land banks obtain title to these properties, they can apply a more comprehensive strategy around the disposition and repurposing of entire neighborhoods of low-value assets to maximize community benefits. Uninhabitable properties can be demolished, and viable properties can be rehabilitated and sold as quality, affordable housing.

Private sector partnerships also encourage responsible entrepreneurs to purchase and rehabilitate vacant properties to provide safe and affordable housing, especially to lower-income people and first-time home buyers, either through rentals or rent-to-purchase opportunities.

Partnerships and alliances with non-profit groups and private investors also help municipalities to protect fragile housing stock. Among those partners should be credit counseling and foreclosure prevention agencies that can work with troubled homeowners to help them keep their homes. Community development corporations and housing agencies also are important partners that connect lower-income homeowners with agencies that offer assistance with home repairs so that their properties maintain value.

As an industry, it is incumbent upon us to work with our state and local elected leaders to identify and support effective and creative solutions that not only will protect neighborhoods and home values, but will also begin to grow them again.

To view the article as a PDF, please click here.

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees  and a handful of contractors performing services in the Midwest, to a national company with more than 1,600 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.

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CHIEF EXECUTIVE OFFICER

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.

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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.

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CHIEF INFORMATION OFFICER

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”.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.