Page 257 – Safeguard Properties

Forging Ahead

Posted on September 13, 2018October 29, 2018 by Safeguard

Safeguard in the News
July 17, 2017

Editors Note: This article was originally featured in the July edition of DS News.

Perhaps it was more than coincidence that a successful postapocalyptic television series began the year after the Great Recession ended. AMC’s zombie show “The Walking Dead” has become incredibly popular, but zombie homes, which still dot and blot cities across the country years after the housing downturn and foreclosure crisis, are most certainly not.

“With houses in permanent limbo, whether a zombie title or a blight-and-vacancy issue, it drives down property vaues and it destroys local government’s ability to maintain basic services because the revenue is not there anymore,” said Ohio State Rep. Jonathan Dever, a Cincinnati-area attorney who has worked on both sides of foreclosure cases and introduced a fast-track foreclosure bill in 2016. “It affects our schools, our neighborhoods, and is devastating for families, too.”

CoreLogic reported nearly 7.8 million foreclosures from 2007 through 2016, with the peak coming in January 2011. The state of Florida experienced a foreclosure rate of nearly 12.5 percent in June of that year. By comparison, the national foreclosure inventory rate was 0.8 percent in March 2017, down from 1 percent a year earlier, according to the property analytics firm.

Who benefits from a foreclosure system that negatively affects so many parties? The revived housing market means not only fewer foreclosures, but also a chance for all industry players to improve process flow and apply lessons learned from the Great Recession.

With new regulatory requirements, changes in costs and challenges from homeowner associations, the foreclosure market is constantly evolving. Stephen Hladik, partner at The HOF Law Group located north of Philadelphia, emphasizes the importance of establishing a better dialogue between the public and private actors to forge a process that serves the greater good. On the other hand, he points out that cities and other municipalities have become “much more aggressive” in pursuing lenders and servicers for fines and the often-exorbitant costs related to foreclosure properties, even before the lender takes title to a property.

“Unfortunately, outdated foreclosure laws can leave these homes vacant and vulnerable for years, fostering the spread of community blight,” says Robert Klein, Chairman and Co-founder of Community Blight Solutions in Cleveland, Ohio. “As long as these properties remain vacant, they contribute to a self-perpetuating cycle of blight and instability in the community. Houses that stand empty suffer structural damage from weather and climate changes, and vacant properties are hubs for crime, drug activity, and [are susceptible to] fires and become havens for squatters.”

A State of Foreclosure

Is yours a judicial or nonjudicial state? The answer can mean a difference of 280 days on average in the foreclosure process, according to Fannie Mae.

“I often jokingly tell my clients that ‘judicial’ is a Latin word meaning really slow foreclosure,” Hladik said.

Klein said that, in general, states that use mortgages conduct judicial foreclosures and states that use deeds of trust conduct nonjudicial foreclosures. The most problematic stage in the foreclosure process can be the sometimes three or four years it takes in judicial states to get the required court action on a foreclosed home. Absence certainly does not make the heart grow fonder in the foreclosure process.

“The longer properties remain vacant, the greater the chance problems will occur, including vandalism, crime, and lower property values,” said Klein, whose company focuses on two main initiatives: fast-tracking foreclosure legislation and replacing with clear polycarbonate boarding the unsightly and ever-present plywood on vacant and abandoned properties.

Hladik added, “While most counties in Pennsylvania move foreclosure cases, the judicial process certainly adds to the timeline involved.”

Pennsylvania’s foreclosure inventory peaked in August 2012 when unemployment reached 8.3 percent. CoreLogic reported that the Quaker State’s foreclosure inventory was down to 1 percent in March, which reflects a year-over-year decrease of 0.3 percentage points. Prior to fourth quarter 2015, Pennsylvania’s foreclosure timeline of nearly 2.25 years, measured from the date the borrower last paid the sale, was 36 days greater than the average for judicial foreclosure states, according to Fannie Mae data.

Hladik notes that such states—New Jersey and Delaware—are other examples. They still have longer foreclosure timeframes, but cases are “certainly” moving faster through the former’s foreclosure process than before. Also, lenders, servicers, and investors are stepping up.

“On a local level, lenders and servicers are more accurate in their valuation assessment of properties, and thus have better calculated upset bids at the public foreclosure sales,” Hladik said. “Also, we see more [foreclosed homes] being sold to third parties at those sales. This is good: it means less properties in REO management and that investors are fixing these properties up and reselling them. A rehabbed property is better for the whole neighborhood.”

Another factor pumping the brakes on Pennsylvania’s foreclosure process is the increased number of contested foreclosures. “They can literally take a few years to get to trial,” Hladik adds.

Hladik calls Pennsylvania very diverse, with 67 counties and “almost 67 different methods of conducting foreclosure sales. The main challenge in foreclosures is the costs involved these days. With the deposit to schedule a sheriff’s sale increasing from anywhere to $3,000 to $4,000, the cost has gone up enormously.”

The Pennsylvania State University graduate puts the cost spotlight on Philadelphia, where the city runs the gas, water, and sewer utilities. When a property goes to sale and the lender takes it back, it must pay all past-due taxes, water, sewer, and gas costs before obtaining the deed to the property. “This cost can be thousands of dollars and often can equate to the value of the property itself,” he said. “Foreclosure sales in Philadelphia can prove incredibly expensive.”

As a result of foreclosure costs approaching or equaling the value of many abandoned properties, lenders may decide not to foreclose, which only exacerbates the city’s blight problem.

As Stern & Eisenberg, P.C.’s lead attorney for Maryland, Virginia, and the District of Columbia, Kevin Hildebeidel has his expert eye on various backlogs in different states and other municipalities. For example, D.C. courts are concerned about approximately 3,000 foreclosure cases still on the docket after being inadvertently stalled between 2010 and 2012. In downstate New York, 80,000 outstanding cases not surprisingly draw substantial focus.

“One would think that in a truly up market, some of these houses would regain equity and therefore, owners might be inclined to cash out,” says Hildebeidel. “Unfortunately, the length and complexity of judicial foreclosure proceedings still gives borrowers the upper hand when it comes to delay and costs. Many appear to prefer staying in the house effectively ‘rent free’ during the pendency of the case.”

The system breakdown goes further than judicial versus nonjudicial to types of judges, elected or appointed. Hildebeidel maintains that the former are not inclined or even “loathe” to order any kind of adequate protection payments or equitable payments to balance the scales in this stalled scenario.

“Until this can be accomplished, a large number of cases may continue to linger in the judicial and particularly the elected judicial states,” he added.

Although a bill is presently pending before the state legislature, Pennsylvania does not have a statute providing for streamlined foreclosures of vacant or abandoned properties. Hladik notes that the time and cost involved in foreclosing a vacant property exceeds that of an owner-occupied property. “This is because the lender must obtain orders for special service of process and also must publish notice of the foreclosure, thus escalating time and cost,” he added.

The second major geographical difference, other than the judicial versus nonjudicial state foreclosure setup, is seasonality and weather, according to Jerry Rowell, Managing Director of Assurant Field Services. Vacant properties require higher levels of preventative maintenance and, therefore, tend to have increased risk exposure.

“Thirteen out of 21 predominantly judicial foreclosure states are located primarily on the East Coast and northern tier,” Rowell said. “The seasonal weather extremes in those states cause challenges to the industry when maintaining vacant properties. Examples of this are freezing winters and humid summers where conditions can seriously damage or cause hazards to properties.”

Lessons from Losses

Positive things arose from the foreclosure crisis, as well they should—some gain ought to come from the considerable pain. Lenders and servicers are much better equipped in loss mitigation and borrower assistance, according to Hladik.

“More than 20 counties in Pennsylvania have adopted mediation programs, and the early intervention in the foreclosure process has assisted many borrowers,” Hladik said. “These types of programs simply did not exist more than 10 years ago.”

Hildebeidel reminded that another hard-hit aspect of the housing crisis was the image and reputation of lenders and servicers. “The pendulum of public opinion has swung very far against them,” said Hladik. “But, for the most part, they kept doing business, which means they kept paving the way, so to speak, to the American Dream of homeownership, which is on sound footing once again.” And to support Hladik’s point, those mortgage companies didn’t stop at business as usual.

“Robust loss mitigation processes exist for homeowners who find themselves in financial difficulties and the processes are working well for most of the participants,” Hildebeidel said. “This safety net should be counted as a very positive development.”

The industry trauma and resulting regulatory response has also led to better data and workflow management.

“The review of foreclosure complaints and documentation and verification of chains of assignments and perfected endorsements of notes is much better than previously,” Hladik said. “The records maintained by lenders and servicers are better and the information communicated to attorneys on files has improved.”

Lenders and servicers are definitely running tighter ships, although many will argue that, from a regulatory standpoint, the improved document controls amount to a small positive in the face of the very big burden in time and expense. Costs involved with foreclosures continue to rise.

Hildebeidel raises the question of statutes of limitations challenges a full decade after the start of the housing crisis. He reports that some states such as Maryland have changed or attempted to change statutes specifically to try to prevent aged debt collection. Case law continues to address the due, default, and “accelerated” status of loan payments and how statutes of limitations apply to the different conditions.

“It should be noted that continued challenges and tightening of statutes of limitations has the somewhat perverse effect of hastening the movement of defaulted loans into the foreclosure process and perhaps abrogating long loss-mitigation processes in favor of more immediate action and resolution,” stated Hildebeidel. “There is no immediate remedy for such an unintended consequence, only the continuing process of educating and explaining to judges and elected officials.”

Caroline Reaves, CEO of Mortgage Contracting Services, sees an increased need for property registration as more municipalities require loan servicers to register properties attached to loans in default.

“It used to be servicers might be required to renew a registration or update it annually,” said the CEO of the more than 30-year-old national mortgage services company based in the Dallas-Ft. Worth metro. “Now, many municipalities require multiple updates to a registration based on the status of the loan and the property. If any updates are missed, it is possible for the penalties to amount to $100,000 on a single property.”

Becoming more and more expensive, registration fees are based on the length of time the property has been vacant or foreclosed and, in some cases, can amount to $5,000 a year, Reaves reported.

“Another trend we are seeing involves bond fees, which are becoming increasingly popular with municipalities and can be as high as $25,000 per property,” she explained. “In some cases, only a portion of that money is refunded once the servicer is no longer responsible for the loan.”

Recent legal precedent has the potential to dramatically shorten some foreclosure processes, according to Hildebeidel. An Eleventh Circuit Court ruling last year after a Florida bankruptcy court appeal held that a debtor who surrenders a residence in bankruptcy must withdraw opposition to state foreclosure actions as the surrender signifies abdication of such rights and claims. The debtor’s failure to abide by the apparent surrender amounted to breaking their commitment to the bankruptcy court and an abuse of the whole process. This decision will continue to tie bankruptcy and foreclosure more closely together, Hildebeidel asserted, although other jurisdictions, including Hawaii, have already dissented.

Not only a mortgage, bankruptcy, title, and real estate tax sale legal expert, Hladik also served as Deputy Attorney General in the Harrisburg office of the Pennsylvania Bureau of Consumer Protection. He sees promise in the economic, institutional, and legislative momentum with regard to the current foreclosure system.

“Legislation being enacted across the country that can streamline the foreclosure timeline on a vacant or abandoned house benefits many different stakeholders: the lender, the neighborhood where the property is, as well as the municipality that relies on that property for tax revenue,” said Hladik.

Diane Bowser, Executive Vice President, Special Servicing, at Houston-based Selene Finance, said the words “speed,” “expedite,” and “foreclosure” don’t typically go together, and can even feed the “dangerous perception” that the servicer is doing something wrong. However, the new expedited foreclosure process on confirmed vacant properties in Ohio, Maryland, New York, and New Jersey do offer a welcome light in a previously dark part of the housing industry.

“How often do you see a solution that makes all parties happy? Hopefully, we see this practice picked up by even more states,” she added.

Rep. Dever, sponsor of successful fast-track foreclosure legislation that became law in October of last year in the judicial state of Ohio, says good policy speeds up the process while blending together the needs of the property owner, lender, and local communities. The complexity of the foreclosure system is daunting — there are multiple parties and “various states of legal limbo,” from city-owned properties to land banks to sheer zombie titles to other shades of gray — but the major and multifaceted costs demand full focus and effort.

“Many people realized that the system was broken at so many different levels,” Dever said. “When these properties get abandoned, it doesn’t take very long before they become less valuable and more complicated and expensive to fix up. We had to do something, specifically when most of these cases would end up in court for years at a time without resolution.”

Unprecedented economic forces triggered horrific joblessness and millions of foreclosures during the downturn. The toll the recession took on people across the country perhaps clouded another dark side, the wave upon wave of abandoned homes that flooded a wholly inadequate foreclosure system.

Source: DS News

Additional Resources:

DS News (Eye of the Storm)

DS News (Fast-Tracking Foreclosure)

Banishing Blight: Officials, Experts, and Lawmakers Meet for Roundtable

Posted on September 13, 2018October 9, 2018 by Safeguard

Safeguard in the News
July 5, 2017

Recently, in a roundtable event on community blight in Harrisburg, Pennsylvania, a town plagued with 447 cases of vacant or abandoned homes, Senator John DiSanto (R-PA) met with Senator Tom McGarrigle (R-DE), Harrisburg Mayor Eric Papenfuse, the Senate Majority Policy Committee, and Urban Affairs and Housing Committee to discuss the blight epidemic and brainstorm solutions and ways to incorporate them. Robert Klein, Founder and Chairman of Community Blight Solutions, was invited to address the group and discussed his leadership role in advocating at the state and local level for policy and legislative changes, including fast-track and no plywood boarding legislation, to address the problem of community blight.

Senator DiSanto opened the roundtable with remarks on how state legislators are working with local communities to eliminate problems associated with the blight that is ruining communities and wasting taxpayer dollars.

Due to outdated foreclosure laws, vacant or abandoned properties can sometimes stay empty for years, and are vulnerable to structural damages from weather and erosion, as well as ideal breeding grounds for crime, drug-use, and squatters; often times they will act as dilapidated kindling for fires. Fast-track foreclosures allow mortgage servicers to obtain the property faster, rehabilitate it, and put it back on the market before it becomes blight.

Although plywood boarding has been the industry standard for decades, it has quickly developed a stigma of dilapidation and vacancy. It offers abandoned properties little protection from the elements, and is easy to remove for those that wish to use the empty space for suspect actions out of sight of the community it surrounds. Polycarbonate boarding, a clear window and door system, is a much more ideal alternative to prevent squatting

The Harrisburg Roundtable was the first of several planned roundtable events around the commonwealth.

Source: DS News (featured Video Spotlight)

Startup Schooling

Posted on September 13, 2018October 9, 2018 by Safeguard

Safeguard in the News
May 31, 2017

NINE EXPERIENCED STARTUP EXECUTIVES SHARE THE JOURNEYS THAT LED TO THEM GOING IT ON THEIR OWN AS WELL AS THE UNIQUE APPROACHES THAT LED TO THEIR SUCCESSES

RECOGNIZING THE PROBLEM
“Unlike a good bottle of wine, vacant properties do not get better with age,” Says Robert Klein.

And Klein would know. The Chairman and founder of Safeguard Properties, a mortgage field servicing company that has grown from a handful of employees in 1990 to more than 1,500 today, Klein has seen up close the effect that abandoned, boarded-up houses can have on a community, especially during the recent housing downturn and foreclosure crisis.

But instead of turning a blind eye toward the deleterious effects of community blight, the businessman and philanthropist recognized these far-reaching problems, and founded Community Blight Solutions. The organization concentrates on two main initiatives: fast-tracking foreclosure legislation and replacing the seemingly ubiquitous plywood on vacant and abandoned properties with clear polycarbonate boarding.

“Community blight is a cancer that can be cured,” Klein said. “By working together to change legislation and policies that allow blight to fester and by attacking the problem block by block, neighborhood by neighborhood, we can break the cycle and make our communities healthy, safer and productive once again.”

Truly tackling the problem of community blight took acknowledging the many issues that led to it, including the ineffective, unattractive boarding-up methods investors were using— ones that encouraged crime, ruined community curb appeal, and sent local home values plummeting.

“The costs associated with plywood-boarded vacant and abandoned properties continue to escalate,” Klein said. “From vandalism to the property, damage caused by weather because plywood warps over time and costs for re-boarding, we knew there must be a better way to secure unoccupied properties.”

To address this issue—as well as the larger blight problem at hand—Community Blight Solutions got creating, launching SecureView, a state-of-the-art window and door system made of clear polycarbonate.

“SecureView is a practical and attractive alternative to plywood boarding which has become the ugly and stigmatizing symbol of community blight,” Klein said. “Communities, lenders, and servicers across the country are using it to secure their properties, protect, and maintain the value of their asset, and support neighborhood stabilization.”

SecureView and Community Blight Solutions’ legislative efforts have been successful, too. Klein is happy to report that Ohio, Maryland, and other states have passed new fast-tracked legislation. In March 2017, Fannie Mae instructed servicers that clear boarding should be installed on properties already sealed with plywood, and provided a 90-day compliance period. A new clear boarding allowable was included in the recent clarification, and Freddie Mac recently updated its allowable for servicers using clear boarding on pre-foreclosure properties.

Source: DS News (full feature)

Safeguard Employs Strategic Systems to Capture Property Conditions in Real Time

Posted on September 13, 2018October 29, 2018 by Safeguard

Safeguard in the News
February 1, 2017

Introduces major advances in its mobile platform

THE COMPANY

Safeguard Properties is the mortgage field services industry leader, inspecting and preserving vacant and foreclosed properties across the U.S. Founded in 1990 by Robert Klein and headquartered in Ohio, Safeguard leverages technology to develop industry best practices and quality control procedures.

“Technology plays a strategic role at Safeguard and within the field services industry,” said Alan Jaffa, Safeguard CEO. “We have invested in providing state-of-the-art systems and programs to ensure we continuously remain technologically advanced.”

The company’s technologies improve quality of work using geo-location services; big data analytics and workflow distribution; state-of-the-art data centers that ensure stability and redundancy; and mobile capabilities that provide real-time results.

Recently, Safeguard introduced major advances in its mobile platform. The company’s goal is to create a real-time two-way conversation with its contractors utilizing the latest advances in video, GPS, and smart scripting – which is no longer a back-office function for its contractors. They are now able to capture the property condition in real-time on-site and communicate it back to Safeguard within minutes.

Next in the evolution of technology for the industry, Safeguard plans to work with mortgage servicers and investors to extend this automation into their back-office workflow so they can have better visibility and make important time-sensitive decisions.

Through extensive beta testing, Safeguard has concluded that video will be the future for documenting property condition and “telling the story of a property.” However, it is important that the video app — and the corresponding business process to review the results — are carefully designed for simplicity and speed.

“The result for our clients is going to be a game-changer in terms of quality and our ability to communicate property condition,” said Jaffa. “By critically looking at current issues and those on the horizon, Safeguard provides solutions to minimize risks to clients and properties.”

THE EXECUTIVES

Robert Klein, Founder and Chairman

Robert Klein is the founder and chairman of the board for Safeguard. Under Klein’s leadership, Safeguard grew from a handful of employees in 1990 into the largest field services company in the industry, with an extensive network of contractors throughout the United States.

Klein serves as chair of the National Vacant Properties Registration Committee of the MBA and he represents not only Safeguard, but the industry as a whole in national associations including MBA, USFN, CMBA and REOMAC. He also is the founder of the National Property Preservation Conference. In 2009, Klein received the prestigious Ernst & Young Entrepreneur of the Year Award.

Alan Jaffa, CEO

Alan Jaffa is the CEO for Safeguard, a role he assumed in May 2010. Previously he served as chief operating officer.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 complementary markets. Under his leadership, Safeguard has doubled in size and, in 2010 and 2011, it was recognized as the fastest-growing large company in Northeast Ohio.

Gregory Robinson, CPA, Chief Financial Officer and Executive Vice President

Gregory Robinson directs all accounting and financial management activities at Safeguard, including financial reporting, planning, budgeting, forecasting, cash management, lender relationships, internal control processes and oversight and analysis of financial results. He also oversees quality assurance, information security, internal audit, corporate communications and support services, and serves on the board of advisors for SCG Partners. Previously, Robinson led successful consulting practices at CGI Inc., NetGov Inc. and ORION Consulting. In 2010, he was recognized by Crain’s Cleveland Business as CFO of the Year in the category of large private companies.

Source: HousingWire

The Shift in Pre-Foreclosure Property Management

Posted on September 13, 2018October 3, 2018 by Safeguard

Safeguard in the News
November 30, 2016

The use of plywood in securing vacant homes has come under more scrutiny in recent years due to the spread of community blight in many areas following the foreclosure crisis. Critics of plywood say that while it is cost-effective, it advertises that the home is vacant and therefore invites vandalism, squatters, and violent crime as well as lowers property values for surrounding homes.

A seismic shift occurred in the way pre-foreclosure properties are managed and maintained with Fannie Mae’s announcement in early November at the National Property Preservation Conference (NPPC) of a new allowable promoting the use of polycarbonate clearboard instead of plywood on pre-foreclosure properties.

Starting on November 9, all vacant Fannie Mae-owned properties, whether in pre- or post-foreclosure state or REO, were required to use an alternative to plywood to secure vacant homes, with a 90-day adoption period for all servicers and vendors to comply.

The announcement was hailed as a “game changer” for the industry by Five Star Institute President and CEO Ed Delgado, who said, “This is a major step forward for the cause of curbing urban blight across communities.” Robert Klein, Founder of Community Blight Solutions and an advocate of polycarbonate clearboarding for many years, said of Fannie Mae’s announcement, “This move will have a tremendous impact on ensuring that properties return to the market in a more stable and marketable condition.”

Fannie Mae began using clearboarding to secure vacant homes in REO in 2013 and went nationwide with it starting in early 2014. But using it in the pre-foreclosure process began recently with the announcement in early November.

“Just from a strategic perspective, we felt it was the right point,” said Jake Williamson, VP of Real Estate Fulfillment with Fannie Mae. “We have multiple years of data to prove the value of the product on the REO side. When servicers use plywood boarding in pre-foreclosure, and that asset gets foreclosed on and goes into Fannie Mae REO inventory, the first thing we do is take the plywood down and put the clearboarding up. So the thought process was, ‘Why are we doing this twice?’ It makes complete sense to install it in pre-foreclosure and based on the durability of the product, it would last all the way through REO, so you actually get a lower-cost solution.”

Alan Jaffa, CEO of Safeguard Properties, said his company has been using clearboarding for vacant homes for some time, but in a limited capacity during the pre-foreclosure process—until now.

“Fannie Mae’s announcement has been very exciting for us,” Jaffa said. “It’s been something that we’ve been watching closely and we feel is a great product and very much warranted and needed to further prevent blight in communities.”

In addition to preventing the spread of blight, advocates of clearboarding say it is aesthetically pleasing as opposed to plywood.

“A vacant property boarded with a clear product is less of an eyesore,” Jaffa said. “In my mind, there’s no doubt that the property with the clearboarding looks better.”

The cost of clearboarding, which is approximately three times that of plywood, has prevented more servicers and vendors from adopting it. But those who use it say the cost of clearboarding is cheaper in the long run because it only needs to be used once on a home, whereas plywood often needs to be replaced multiple times as it deteriorates. Fannie Mae will reimburse servicers or vendors for the added expense of using clearboarding or a more expensive alternative to plywood.

According to Williamson, the problems brought on by using plywood, such as vandalism, bring on additional costs outside of the cost of the materials that do not come with using clearboaring. “Even though it’s more expensive as a solution itself, the cost associated with just going plywood outside the cost of the material is significant enough to where clearboarding makes a lot of sense,” Williamson said.

Tim Meyer, VP of Field Services with Altisource, said his company uses polycarbonate to secure vacant homes where it is required by local law, and Altisource is currently working with clients to evaluate Fannie Mae’s new clearboarding allowables for use on Fannie Mae portfolios. He also said they are evaluating the potential use of polycarbonate on other portfolios in the future.

“If we’re able to make it cost-competitive at scale, polycarbonate gives us an opportunity to reduce the impact of vacant homes in our communities and specifically reduce the enticement risk of a vacant home that’s boarded with plywood,” Meyer said. “In essence, polycarbonate makes it look less like a vacant home and more like an occupied property, which will better protect our clients,investors and communities.”

Source: DS News

Additional Resource:

MReport (The Changing Pre-Foreclosure Landscape)

Industry Insight: Property Preservation Goes Mobile

Posted on September 13, 2018October 9, 2018 by Safeguard

Safeguard in the News
November 11, 2016

Joe Iafigliola is the VP of Vendor Management for Safeguard. Iafigliola leads vendor recruiting, sourcing, execution, controls, and field quality control teams. He has been in a wide variety of roles in finance, supply chain management, information systems development, and sales and marketing. Iafigliola career includes senior positions with McMaster-Carr Supply Company, Newell/Rubbermaid, and Procter and Gamble. Iafigliola has an MBA from the Weatherhead School of Management at Case Western Reserve University and a bachelor’s degree from The Ohio State University’s Honors Accounting program.

DS News sat down with Iafigliola to discuss the importance of mobile technology in the property preservation space of the housing industry.

How does mobile technology benefit those in the property preservation space?

I think it’s a couple things. The first is you have a device per person. While you can’t necessarily prevent someone lying about who they are, you know that one device is present at a particular place, because of its unique identification. By knowing that, you can get a feel, at least from an analytical standpoint, of who is using the device and where that device is.

Second, we can then tie a person to that device with a background check, with training, etc., so that by allowing them to access the work order, we know who they are and where they are.

Then, while you can certainly provide paperwork orders and have people do checklists and things like that, having the mobile device, and walking people through different areas of a property and different stations, etc., makes sure that the worker who’s actually doing the work has the full structure of, either, of the property assessment or the work that needs to be done. You don’t have this translation loss, either because they didn’t read the work order in full or the person they work for didn’t give them the full work order. The main idea is you can structure it so you know they have the full set of instructions.

It’s also very hard to fake photos because if you’re taking them on a mobile device, you can geo-tag them and time tag them. Then by placing the photo in a captive application, there isn’t a way to manipulate and mess with the photo metadata while it’s in the application.

Coming very soon is the ability to know where the property is as well as know where the device is, and if there’s a mismatch, an alert is sent. It’s less than 1/10th of one percent that this happens, but every single time you go to a wrong property, it’s obviously a significant event. Every layer of control that you can provide to make sure you’re at the right place is critical, so front of house photos, address validation, and now with the ability to compare to where you think it is from a GPS standpoint, one more layer of control is added.

I imagine using mobile cuts time out of the process. Is that the main intent?

Our main intent is to increase the quality of the work and the controls, but it does have a side benefit of productivity. You don’t have a person with a yellow pad that then has to translate to a person that’s sitting in front of a computer somewhere trying to make sense of the photos and the notes. I think it does, ultimately, save time because you only have to do it once. I always think of that as more of a side benefit as opposed to the main objective.

Which is to improve the quality, correct?

Yes. I’m sure you’ve heard this from others, but if I’m at the property doing the work, I have the best set of information. If I then tell someone to put that in the computer system, who then tells someone at a field service company, then tells a client, who then tells an investor, obviously, the classic game of telephone. You lose information. The fewer layers we can have, the better we are. Having a person who’s doing the work with a mobile device answering everything and then plumbing that information all the way through to client investor, gets rid of the information loss. That’s part of our whole system of improving controls.

Source: DS News

Fannie Mae: Plywood Unacceptable for Pre-Foreclosure Properties

Posted on September 13, 2018October 9, 2018 by Safeguard

Safeguard in the News
November 4, 2016

The progress that clear boarding has made over the last few years when it comes to replacing plywood as the go-to method for securing vacant homes has been steadily picking up steam. Now, that progress appears to have kicked into overdrive.

Jake Williamson, Vice President of Real Estate Fulfillment at Fannie Mae announced at the National Property Preservation Conference (NPPC) in Baltimore, Maryland, a new allowable from Fannie Mae that promotes the use of clear boarding on pre-foreclosure properties.

Fannie Mae has been using polycarbonate clear boarding to secure vacant homes since early 2014 and as of this summer, it had been installed in about 4,000 Fannie Mae properties. Fannie Mae started using clear boarding in four states originally (Illinois, Florida, Ohio, and Michigan).

The new allowable announced by Fannie Mae at the NPPC finds the use of plywood unacceptable when securing vacant properties. Now all vacant properties owned by Fannie Mae will be required to be secured by an alternative to plywood, whether in pre- or post-foreclosure state, or REO starting on November 9. There will be a 90-day adoption period for servicers and vendors to apply the new rule going forward, according to Fannie Mae.

Five Star Institute president and CEO Ed Delgado was at the conference moderating a panel on the state of the housing industry and commented upon hearing the news. “This is a major step forward for the cause of curbing urban blight across communities,” said Delgado. “The application of plywood to a property is a tell-tale sign that the home is vacant and advertises it as a potential haven for criminal activity. Removing plywood from the equation while advancing clear boarding is a game changer.”

The use of clear boarding is expected to greatly reduce the problems that often result from using plywood to board up windows on vacant properties, such as community blight, lower property values, vandalism, squatters, and violent crime.

Despite the higher upfront cost, the rationale is that servicers will actually save on costs in the long term because of the product’s ability maintain the value of the property and shorten the disposition process.

“Eighty percent of the issues that the industry has with the conveyance timeline are resolved when the industry moves toward clear boarding,” said Robert Klein, Founder and Chairman of Safeguard Properties and Founder and CEO of Community Blight Solutions. “This move will have a tremendous impact on ensuring that properties return to the market in a more stable and marketable condition.”

Brandon Johnson, CEO of property preservation company GTJ Consulting in Detroit, told DS News in May 2016: “We try to explain that the benefits, in our mind, far outweigh the additional cost, because it’s a long-term solution. You can’t get in, you can’t break through it, and it withstands the elements. It doesn’t disintegrate over time, and it looks much better, because when you drive by, you can’t even tell that the property is boarded up. On a number of levels, we feel it’s a great product, and a definite step forward in the urban fight against blight for communities.”

Source: DS News

The Housing Industry?s Response When Disaster Strikes

Posted on September 13, 2018October 3, 2018 by Safeguard

Safeguard in the News
October 10, 2016

As of Monday morning, Hurricane Matthew was still raging up the East Coast. More than a million homes lost power in Florida as a result of the storm, while several other states experienced massive flooding that resulted in damage to hundreds of homes.

How does the industry respond when a natural disaster causes so much residential property damage?

For starters, there are some preventative steps to be taken.

“Clients can assess not just delinquent portfolios but their currently performing portfolios so they can assess how many properties are in harm’s way,” Safeguard Properties Chief Operating Officer Mike Greenbaum said. “The reason why that’s important is there are some things you can actually do to prevent damage. Some of our clients will actually have us go out and do some hurricane boarding, which means putting plywood or Secureview clearboarding up, to protect the asset. That’s actually on the front end, so you can minimize the damage that’s going to happen to the extent that you can.”

But after the storm has come and gone, there are four steps to take, Greenbaum said.

“Define what areas were affected, overlay how many assets are in the affected area, get an inspector out to the property so you know what was damaged versus what wasn’t damaged, and then work with your clients to have them actually get pre-approvals so that we can start taking steps to fixing the property when we physically visit,” he said. “We’ll take our active inventory and go back to our individual clients, and then say, ‘Client ABC, it looks like you had 1,042 total assets that were in the affected area. Would you like us to place an inspection order so we can visit the properties and give you a detailed report on whether the asset was damaged?’ Many clients say, ‘Yes, absolutely, get out there and let me know what happened.’ Some clients will actually give us delegated authority allowing us to take curative action.”

Steve McCaffrey, President and CEO of MetroCorp Claims, said,” One of the factors that people will be looking at is whether they have power back in their home and whether their house sustained any substantial damage to where it’s even livable. Fortunately so far for this storm, there has been a lot of physical damage, but structurally most of the properties are still intact and they have sustained physical damage but not to the point where the properties are uninhabitable, provided that they have electricity and normal utilities. People want to get back in their homes as soon as possible for a number of reasons. Number one, if they’re not in their properties, they could be vandalized or burglarized. And then they’ll start the process of assessing the damages and determining if they need emergency services.”

It is possible that many of the homes that are damaged could be in default, and many of them could be unoccupied. When that happens, servicers have to assume that they are damaged, McCaffrey said, and they will want to employ inspection teams with property preservation companies to assess the damage.

“At that point, they’ll evaluate it for filing of a hazard claim. They’ll do any kind of immediate remediation to preserve the property and protect it, identify the level of damage through pictures and notes, and turn that back over to the servicer,” McCaffrey said. “A hazard claim company like ours would get involved to evaluate the level of damage, and a claim would be filed with the hazard claim company to process the claim and get those damages paid for under the insurance policy.”

Source: DS News

Property Management Experts Share Insight on QC

Posted on September 13, 2018October 3, 2018 by Safeguard

Safeguard in the News
September 13, 2016

With a normalization of default, the field services sector is under increased scrutiny. The Property Management Lab at the Five Star Conference on Monday discussed how quality control oversight is increasing, and cities and municipalities are becoming increasingly punitive and because of this it is imperative that the property preservation and field services industry, along with its government and servicing partners, engage in open dialogue about the future of the space.

The Lab began with opening remarks from the lab directors, Jason Chapman, Director of Field Services for Fannie Mae, and Jerry Mavellia, CEO of Guardian Asset Management. The event then went into a discussion over pre-foreclosure oversight. Specifically, a panel lead by Todd Pawlinski, VP of Property Preservation for Caliber Home Loans, engaged in dialogue about what distinguishes a zombie property from a property that is vacant and new legislation that impacts the property preservation model. Panelists included Kellie Chambers, AVP Investor Relations for Safeguard Properties, LLC; David Dolan, COO for ZVN Properties; Tracy Hager, Senior Industry Relations Officer for Mortgage Contracting Services; Adrienne Villalobos, First VP of Shared Services for PennyMac; and Jacob Williamson, VP Single-Family Real Estate Fulfillment for Fannie Mae.

The Lab then progressed to the United States Department of Housing and Urban Development Update lead by Ivery Himes, Director Office of Single-Family Asset Management for HUD. After the update, Brad Phillips, National Field Services Manager for Fannie Mae lead a panel discussion on understanding client core values and lessons learned. Phillips along with panelist Timika Cole, SVP Operations Group Manager for US Bank, and James Taylor, SVP of Asset Management and Property Preservation for Wells Fargo, discussed what they need from their vendors, the importance of understanding core values of a client, how to maximize opportunities with them, and lessons learned during their time in the industry.

Following their discussion, Eric Chader, Advisor for HUD, lead a paneled discussion about the changing focus for property preservation. Panelist in this discussion included Darin Decker, VP of Operations for JPMorgan Chase; Robert Klein, Founder & Chairman for Community Blight Solutions; Matt B. Martin, Director of Servicing and Loss Mitigation for HUD; and Ronnie Ory, CEO for Cyprexx Services. The panel went into in-depth conversation about the recent focus on the larger community and the effect pre and post-foreclosure properties have on the area around them and what the industry is doing to show their commitment to the communitites.

The lab finished with a paneled discussion on the best wat to build a successful network. This panel was led by Chapman, and included Brian Mingham, CEO for National Real Estate Solutions; Dave Sunlin, SVP for Mortgage Contracting Services; Shannon Tomasso, Default Director for PHH Mortgage Corporation, and Sam Tucci, VP of Business Operations for U.S. Best Repair Service. The panel focused on the tricks of the trade to build and maintain relationships throughout the property preservation scope and staying ahead of the changing environment for field services.

Source: DS News

Compliance Addressed By Mortgage Industry Experts

Posted on September 13, 2018October 3, 2018 by Safeguard

Safeguard in the News
September 13, 2016

Compliance has been a major topic of interest, and in many cases a topic of concern, in the mortgage industry in the wake of post-crisis Wall Street reform legislation—notably the Dodd-Frank Act, which passed in July 2010.

Mortgage servicers and other stakeholders in the mortgages space are constantly looking to address their ongoing compliance needs. Many industry experts met on Monday afternoon to participate in the Compliance Lab at the 13th Annual Five Star Conference and Expo in Dallas.

The Compliance Lab was directed by Daniel C. Chilton, Managing Attorney, Citigroup, and included such topics as the issues confronting the mortgage industry now and what the big challenges will be in the future, regulatory changes related to default requirements, systemic risk in the financial environment in which the mortgage industry operates, building and maintaining an effective compliance management program in the current regulatory environment, and an update from the Consumer Financial Protection Bureau on the latest mortgage servicing rules. The presentation on the latter topic was made by Laurie Maggiano, Program Manager for Servicing and Secondary Markets, CFPB.

“The last thing I remember reading about from Director (Richard) Cordray was that there is still a lot of room for improvement in mortgage servicing, especially on the technology side,” said Maria Moskver, General Counsel and Enterprise Compliance Officer with LenderLive. “I think they’re going to come and, through these consent orders and settlements, there are going to be more changes that are required. They’re using UDAP (Unfair and Deceptive Practices Act) as a methodology in terms of how to create change. So you’re not systematically imposing fees—you can’t blame it on your technology anymore. Now you’re going to have to go in and QC every single one of them. I think we’re going to get to a point where we’re it’s going to be even more compliance.”

On challenges that servicers have been facing in the last year since the previous Compliance Lab at the Five Star Conference, Bayview Loan Servicing COO Michael Waldron said, “The big ticket item is the amended servicing rules that have now come out and been finalized. They’ll be implemented in the Fall of 2017 and into the early Spring of 2018. What’s interesting about those is, I give credit to the Bureau for soliciting input from the industry and for their willingness to be responsive to some of the concerns that the industry has had since the January 2014 servicing rules came out.”

Waldron stated that many changes now come in the form of adjustments to existing systems and structures rather than large scale overhauls that the industry has seen in the past. These adjustments “oftentimes make things more difficult for the industry, quite frankly, oftentimes it creates clarity and creates efficiencies. It levels the playing field and can be, if done appropriately, can be empowering to the servicers themselves as well as to the consumers that we serve.”

Speakers at the lab, in addition to Waldron, Moskver, Chilton, and Maggiano, included Michael Barone of Mortgage Quality Management & Research, Myrtle Bowles-Scott of Texas Capital Bank, Edmond Buckley of Aspen Grove Solutions, Mitch Davison of MarketReady, Elizabeth DeSilva of Ditech, Roy Diaz of SHD Legal Group, Will Doby of PennyMac, Steven Frie of S&P Global Ratings, Michael Greenbaum of Safeguard Properties, Brian Montgomery of the Collingwood Group, Sasko Popovski of HSBC Bank USA, Katherine Qin of UT-Dallas, and Jim Vaca of Altisource.

Editor’s note: The Five Star Institute is the parent company of DS News and DSNews.com.

Source: DS News