Mortgage Servicers Still Facing Heat Under Settlement

On January 2, Mortgage Servicing News published an article titled Mortgage Servicers Face More Heat Under Settlement.

Mortgage Servicers Face More Heat Under Settlement

So far, the big mortgage servicers have received stellar report cards for their compliance with the $25 billion national settlement. That could change this year as testing gets tougher—potentially costing these companies further embarrassment and penalties.

There is a big discrepancy between the strong test results to date and the massive number of consumer complaints, says Joseph A. Smith Jr., the settlement monitor. Consumers have filed more than 112,000 complaints with regulators, servicers and housing counselors since October 2012, mainly claiming that servicers are still too slow to determine if borrowers are eligible for loan modifications.

“Borrowers still don’t know what the rules of the road are and how long will it take for a servicer to look at a loan mod application and decide whether they get relief or not,” says Smith.

The biggest potential challenge for servicers could come in April when four new tests go into effect that specifically address consumer complaints about shoddy billing practices, lax communications, and widespread denials of loan mods.

The results of those tests won’t be available until the end of 2014 so it may be some time before it becomes clear how well servicers are complying with the servicing requirements in the settlement. If servicers are deemed to be lagging they would have to fix the problems and face fines if issues are not addressed.

“I think they’ve made some progress but it’s not mission accomplished,” says Smith, the former banking commissioner of North Carolina. “The acid test ultimately is whether the great body of public opinion believes we’re doing the right thing.”

Smith admits it’s unclear whether the testing process will ultimately be deemed a success by borrowers.

“I’m not saying the new metrics will address all the problems, but they have a greater ability to stop the music, to stop foreclosures and dual-tracking,” he says, referring to the process by which distressed borrowers can still be put into foreclosure at the same time that they are trying to get a load mod.

Smith is under pressure from borrowers and the state attorneys general who negotiated the February 2012 settlement to ensure the servicers are held to its terms. He has listened to borrowers describe what he calls “absolute horrific, terrible, unhappy situations,” in which they have fallen behind on their mortgage payments and “are caught up in a web and can’t get out.”

Meanwhile, advocates for borrowers continue to pressure servicers by picketing banks’ headquarters and delivering petitions signed by thousands of consumers. Advocates say the monitoring process is too weak and that the protracted testing period has worked against homeowners trying to save their homes from foreclosure.

“The experience of lots of borrowers out there is that banks are still slow to respond, they lose peoples’ paperwork and give consumers the runaround,” says Kevin Whelan, campaign director for the Home Defenders League, a consortium of nonprofit housing advocacy groups. “It doesn’t seem like banks have fundamentally altered their behavior in exchange for the liability they were released from in the settlement.”

The $25 billion mortgage settlement, which grew out of the robo-signing scandal, required that the top five servicers—Bank of America, Citigroup, JPMorgan Chase, Wells Fargo and Ally Financial, formerly known as GMAC—dole out $20 billion in consumer relief in the form of principal reductions, refinances, loan modifications and short sales directly to borrowers.

Smith also has been auditing the banks’ progress in meeting that $20 billion monetary requirement, which all of the servicers say they’ve completed. But there has been widespread criticism that the banks gave out the vast majority of aid in the form of short sales and forgiveness of second liens, while just 20% of relief was in the form of principal reduction of borrowers’ mortgages.

(The servicers paid another $5 billion in cash to individual states and the federal government when the settlement was signed last year.)

Mortgage servicers had previously been subject to little or no regulation, and when the housing crisis hit, they were overwhelmed by requests for loan mods.

“We have gone from a model that was not monitored ever before to a process that is monitored on a second by second basis,” says Ron D’Vari, CEO of New Oak Capital, a New York advisory firm that oversees servicing for private label investors. “They are trying to bring discipline to a process that really was not measured before, and they are working damn hard to get it done. But it’s complex and unfortunately, because of mistrust, it has to be very precise.”

In a compliance report released in December, Smith identified just seven failed tests in the first half of the year by three servicers—B of A, Citigroup and JPMorgan Chase—out of nearly 250 tests conducted so far. Wells Fargo, the largest servicer, passed all of the tests with no failures.

None of the failures identified so far have resulted in any harm inflicted on borrowers.

But a key issue is the long lag time of nearly six months between the testing and the monitor’s reports.

The monitor established 29 original tests that would determine whether the banks were complying with more than 300 servicing standards. The tests were phased in over the course of a year, and the banks were able to pick which tests they wanted to do first, allowing them to choose the low-hanging fruit that was easily fixable, according to two accountants with independent oversight of two servicers.

So it won’t be until June 2014 that Smith will have a year-over-year comparison of banks’ compliance with all the servicing standards.

Smith had to singlehandedly set up a quasi-regulatory agency in just six months with extensive work plans, overseen by 270 independent accountants and advisors. So far, the banks have paid $41 million for the settlement monitor’s work. The majority of the money has been paid to professional advisory firms including BDO Consulting, which developed uniform standards for determining whether the banks were in compliance.

Smith says most of the criticism has been about the structure of the settlement, not how he is overseeing it.

“I’m not pimping for the banks, I’m not their lawyer,” Smith says. “I’m putting stuff in the public domain about how this process works. I’m proud of it.”

Please click here to view the online article.

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:



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.