Mortgage Banking “The Worst of the Foreclosure Crisis: Are We There Yet?”

Mortgage Banking Magazine ran an article in its February 2009 issue about the forecasts for the mortgage foreclosure crisis through 2009 and beyond.

The Worst of the Foreclosure Crisis: Are We There Yet?

ARM resets and high unemployment will compel us all to develop even more effective and creative solutions for maintenance and disposition of vacant and abandoned properties.

By Robert Klein

One of the biggest questions these days at business functions and family gatherings has to be, “When do you think the mortgage crisis will bottom out?” The mortgage crisis made big news in 2008. Subprime loans were the first wave, blamed for the collapse of financial giants Bear Stearns & Co. and Lehman Brothers, insurance giant American International Group (AIG), numerous banks, the freefall in the U.S. stock market, as well as financial markets across the globe. The Mortgage Bankers Association (MBA) reported that one in 10 homeowners were behind on their loans — the highest number since 1979, when data began to be tracked.

In the fall of 2008, Congress passed a historic rescue package in an attempt to shore up the banking and financial markets and prevent a predicted global crisis. As a result, some experts predict that the country may see a leveling of the foreclosure crisis later in 2009. Others disagree.

Late in 2008, in a segment on CBS’ 60 Minutes, financial adviser Whitney Tilson predicted that the United States is only about halfway through the mortgage crisis. He pointed out that even at the introductory teaser rates characteristic with adjustable-rate mortgages (ARMs), an unusually large number of homeowners have been defaulting on their loans.

Tilson predicted that 50 percent to 70 percent of ARMs ultimately will default once loan rates reset, potentially doubling monthly loan payments for many borrowers. Because of this, he believes a second and potentially more severe wave of defaults and foreclosures is on the way, as ARMs reset to higher rates in the next two, three and even five years.

Rising unemployment — the third wave?

The result of the mortgage crisis has been a general tightening of credit markets, both for consumers and businesses. Without credit, businesses can’t grow and consumers can’t spend. The impact is evident nearly every day, as newspaper business pages carry news of layoffs in virtually every industry sector. The United States is experiencing unemployment rates unseen since the 1970s, and especially hard-hit have been the auto and recreational vehicle markets, banking, retail and tourism.

The Bureau of Labor Statistics (BLS) reported that payroll employment fell by 524,000 people in December 2008 alone and by 1.9 million during the last four months of 2008, while unemployment reached a 15-year high of 7.2 percent. Those levels are expected to continue, and even increase, into 2009.

And those statistics don’t even include the legions of the long-term unemployed, estimated to be at more than 2 million nationwide. These are the people who have given up their job searches and therefore are no longer counted on the unemployment rolls. Nor do the statistics reflect the countless numbers of underemployed people who have taken part-time or lower-paying jobs after being laid off from their previous positions, and who struggle to make ends meet.

Sustained rates of unemployment and underemployment are certain to trigger even higher levels of defaults and foreclosures. Without jobs, more people — even those who bought homes at low rates with conventional mortgages — will be at risk of losing their homes.

Freddie Mac reported that in 2006, 36 per-cent of all loans more than 90 days delinquent were related to job losses. In the first half of 2008, job-related delinquencies jumped to 4 percent.

If unemployment continues to rise in 2009, as many economists predict, we’re unlikely to see a leveling off of foreclosures; rather, the more likely outcome is foreclosure volumes that persist and may even grow into 2010.

New approaches needed to address higher volumes

What that means for our industry is that the record foreclosure volumes of 2008 aren’t likely to subside anytime in the foreseeable future. In fact, they may get worse. ARM resets and high unemployment will compel us all to develop even more effective and creative solutions for maintenance and disposition of vacant and abandoned properties.

What are some of those solutions?

First and most important, we have to uphold quality standards even as volumes grow at unprecedented levels. It is essential that field servicers revisit their recruitment and training procedures to ensure they have enough qualified contractors to inspect and maintain properties. Especially in challenged markets, we have to redouble our efforts to ensure vacant and abandoned properties maintain their asset value and structural integrity, and don’t create a nuisance for neighborhoods and communities.

Second, as greater numbers of real estate-owned (REO) properties linger on the market for longer periods, we need to enhance REO services so that these properties can compete with traditional-market homes that also are lingering on the market. In a more competitive market, REO properties should be maintained with curb appeal and “nesting” appeal in mind. When potential buyers drive up to an REO property, they should see a home maintained to the standards of the rest of the neighborhood — with a well-manicured lawn, neatly trimmed landscaping and a yard free of debris.

On the interior, the REO property should be clean and inviting. Even if the property isn’t in a high-value market, it can and should look and smell clean. It doesn’t cost much to scrub floors and carpets, wash walls, wipe down counters, remove cobwebs and clean appliances and plumbing fixtures. The payoff is Iikely to be well worth the investment if homeowners walk through the door and can envision a home where they want to raise a family.

A third solution is finding new approaches to dispose of REO properties that struggle to find buyers. Many servicers have actively embarked on REO-gifting as a way to reduce their portfolios, by donating them to community development groups, land banks and other non-profit entities. The challenge for both servicers and the acquiring organizations has been finding one another and matching up appropriate properties.

Through creative partnerships, clearinghouses can be developed whereby community organizations and land banks can access properties through a “one-stop-shop” approach. Additionally, by pooling properties in targeted neighborhoods, it may be possible to offer communities a package of properties that may be more appealing for economic or community-development purposes.

As an industry, we have the potential to turn the current economic challenges into opportunities for future community development. By focusing on effective ways to maintain the integrity of vacant homes, we cannot only make them more appealing and desirable for potential homeowners, but we also uphold the asset value of properties. And by identifying creative solutions for disposing of surplus properties, we can help communities survive and evolve to meet their changing needs.

Robert Klein is founder and chief executive officer of Sateguard Properties, Brooklyn Heights, Ohio. Founded in 1990, Safeguard is the largest privately held mortgage field service company in the United States. He can be reached at



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.