Page 259 – Safeguard Properties

Industry Leaders Take on Housing Challenges at National Property Preservation Conference

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

On November 6, DS News released an article discussing the 2014 National Property Preservation Conference (NPPC), hosted by Safeguard Properties. The article features comments by Safeguard CEO Alan Jaffa and Founder and Chairman Robert Klein discussing the role of the conference to be a platform for open communication within the housing industry.

Industry Leaders Take On Housing Challenges at National Property Preservation Conference

Housing industry leaders gathered Thursday at the 11th annual National Property Preservation Conference (NPPC) to discuss some of the greatest challenges facing housing today and collaborate on how to tackle them head-on.

Hosted by Safeguard Properties in Washington, D.C., this year’s conference featured pannel discussions boasting a host of policy experts offering insights on what’s happening inside the beltway, including Laurie Maggiano, program manager for servicing and secondary markets at the Consumer Financial Protection Bureau; Ivery Himes, director of HUD’s Office of Single Family Asset Management; and Meg Burns, former senior associate director at the Federal Housing Finance Agency and current managing director at the Collingwood Group, among others.

Some of the housing industry’s leading minds—including representatives from Freddie Mac, Safeguard, SolutionStar, and TSI Appraisal—were also in attendance to discuss the current state of housing and property preservation and expectations for the future.

Together, the panels, led by Five Star Institute President and CEO Ed Delgado, fielded questions on topics ranging from compliance challenges to the government’s growing oversight of the housing industry, including what’s on the agenda for 2015.

“It’s clear that property preservation companies are increasingly playing a larger role in the stabilization of homeownership and communities” said Caroline Reaves, CEO of MCS, one of the nations leading property preservation companies and a key sponsor of NPPC. “The dialog from this event will go a long way in establishing best practices and compliance as an industry for 2015 and beyond.”

The event kicked off Thursday morning with remarks from Delgado, who described the outlook for housing as one of “reserved confidence.” That was followed by a keynote address delivered by Leonard Kiefer, deputy chief economist at Freddie Mac.

Alan Jaffa, CEO of Safeguard Properties, said the conference serves as a jumping-off point for a dialogue that will hopefully continue.

“I’m hearing a lot of great conversations taking place around the roles we all play in maintaining properties and communities,” Jaffa said. “We all come from a different perspective, but property preservation is a team effort.”

Safeguard’s founder and chairman, Robert Klein, echoed Jaffa’s sentiment.

“When I initiated the conference 10 years ago, my goal was to create a platform for open communication—an opportunity for truly honest dialogue about the issues we face as an industry,” he said. “In these discussions, everyone’s perspective is important, and everyone, from lenders to policy makers, GSEs and community groups, has a seat at the table. A decade later, the conversation continues to evolve and produce real solutions.”

Please click here to view the article online.

About Safeguard
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders, and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally.
Website: www.safeguardproperties.com.

Five Minutes with Alan Jaffa

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

The November issue of DS News focused on Safeguard Properties CEO Alan Jaffa as the subject of its feature FIVE MINUTES WITH.

FIVE MINUTES WITH
Get to Know Industry Executives Beyond the Boardroom

Alan Jaffa
CEO, Safeguard Properties

Alan Jaffa has served as CEO of Safeguard Properties since 2010. Prior to becoming Safeguard’s CEO, Mr. Jaffa served as the company’s COO and SVP of Operations. He joined Safeguard in 1995 and has been at the forefront of the company’s growth from a small startup to the nation’s largest privately held mortgage field services company.

Has the enhanced regulatory landscape changed the way Safeguard does business?
The heightened regulatory landscape has helped us identify and remediate any gaps in our robust quality assurance processes. We also have been able to build stronger relationships with our clients through onsite audits. Each one serves as an opportunity to enhance and strengthen our processes.

Additionally, Safeguard’s national vendor network works to ensure operational controls, adequate personnel screening, training and quality assurance. While we conduct business and compliance audits and background checks on our primary vendors, we also require that they perform audits and background checks on their employees and subcontractors.

Safeguard is committed to building and sharing industry best practices to protect the integrity and value of our nation’s housing stock, to deliver the most efficient services, and to work on behalf of our clients to comply with all regulatory requirements.

As one of the largest field services organizations in the country, Safeguard maintains properties in communities across the United States. What are the processes and procedures that you have developed to serve such a varied geographic area?
With the millions of points of data our vendor network collects every day, Safeguard analyzes that information to ensure the appropriate number of vendors is assigned in each geographic location, and we monitor performance indicators to effectively complete work in communities across the country.

We use data to create heat maps to visually identify servicing needs in a particular location so work orders are funneled appropriately. This is coupled with vendor quality results and performance indicators to ensure that vendors can handle the capacity and complete the work effectively.

How is Safeguard maintaining those relationships with communities around the country? What processes has Safeguard put in place to protect neighborhoods?
A large part of Safeguard’s ability to maintain positive relationships with city and code officials is through our Community Initiatives Department and its extensive outreach and education. Our team attends conferences and meets face-to-face with city officials across the country to help cultivate good relationships.

Safeguard continues to maintain and build relationships with municipalities and code enforcement groups in cities across the country through our Code Compliance Department, by providing tools to foster open communication, and ongoing outreach to city and code enforcement officials.

Our code compliance team helps prevent and mitigate compliance issues and advises our nationwide vendor network of all compliance issues or hazards.
We also developed a tool called Compliance Connections that is designed to connect city officials with mortgage servicers to preserve the value of communities and real estate portfolios. This online portal provides instant notification of property issues and fosters communication, which helps expedite resolution.

It seems that today, the expectations placed on field services organizations are higher than ever before. How does Safeguard balance providing quality performance with the speed demanded by the industry today?
Safeguard has made a significant investment in technology to help balance quality and timeliness of work. We have provided our vendor network with a suite of online and mobile tools that have decreased timelines and built-in “smart” scripts and controls that ensure accuracy.

Our mobile applications give our vendors the ability to deliver results while still at a property rather than having to wait until they return to their offices at the end of the day. This allows us to relay those results to our clients in significantly less time than before, helping remediate property issues in a timely manner.

The smart scripts vendors follow on our mobile platform to guide them through the reporting process, including the tracking, labeling, and time-stamping of all corresponding photos. Because the photos are time-stamped within the app, there are fewer opportunities for errors.

You are someone who started early on with the company and worked his way up to the position that you hold today. What advice would you give to industry professionals looking to work their way up the corporate ladder?
The best piece of advice I could give to is to surround yourself with the best and brightest people and trust them to do their jobs. Nobody knows everything, and the more you can rely on smart and talented people, the more successful you’ll be. Safeguard wouldn’t be the industry leader it is today without its dedicated and reliable staff of about 1,700 employees in Ohio, Texas, and Kentucky, and its nationwide network of more than 10,000 vendors across the country.

I also would recommend something Safeguard’s Founder and Chairman Robert Klein instilled in me, and that’s to anticipate the client’s needs. Do not wait for them to tell you exactly what they need, because we are already analyzing the data we collect for them to identify trends and create processes or tools based on those results.

Please click here to view Five Minutes with Alan Jaffa [PDF].

About Safeguard
Safeguard Properties is the mortgage field services industry leader, preserving vacant and foreclosed properties across the U.S., Puerto Rico, Virgin Islands and Guam. Founded in 1990 by Robert Klein and headquartered in Cleveland, Ohio, Safeguard provides the highest quality service to our clients by leveraging innovative technologies and proactively developing industry best practices and quality control procedures. Consistent with Safeguard’s values and mission, we are an active supporter of hundreds of charitable efforts across the country. Annually, Safeguard gives back to communities in partnership with our employees, vendors and clients. We also are dedicated to working with community leaders and officials to eliminate blight and stabilize neighborhoods. Safeguard is dedicated to preserving today and protecting tomorrow. Website: www.safeguardproperties.com.

Safeguard Partners with Habitat to Revitalize Fairfax Neighborhood

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

Fairfax Festival of Community Revitalization helps families buy homes

CLEVELAND, OH – More than 250 volunteers, residents, families and staff from around the country came together on Sunday, June 29 for a festival of community revitalization in Cleveland’s Fairfax neighborhood.

Greater Cleveland Habitat for Humanity is partnering with Safeguard Properties, Fairfax Renaissance Development Corporation (FDRC) and SecureView, LLC. to dedicate a day of service to help 25 existing homeowners with exterior home repairs, remove yard debris and make landscaping improvements.

Last year, Safeguard Properties and 100 of its employees and vendors from around the country dedicated a day to helping existing homeowners on Colfax Road. Pleased with the results, Safeguard will assemble 150 volunteers to work with another 100 families, staff and local volunteers on June 29th. Safeguard is underwriting the cost of the exterior projects.

“Safeguard Properties is committed to Cleveland and emphasizes community service to its employees and vendors,” commented Palmer DePetro, Director of REO Regional Coordinators for Safeguard, and a member of Habitat’s Board of Directors. “We are excited to be back this year to advance this community revitalization effort.”

“This is a great example of partnering with organizations to help existing homeowners,” stated John Habat, Habitat’s Executive Director. “On June 29, we will help 25 existing residents with improvements such as porch and fence repair, landscaping and debris removal; 25 additional families will be helped later in the summer. All assisted homeowners will help with the projects, and pay a nominal fee to help provide materials.

Another new Habitat partner family has completed its sweat equity requirement and will be accepted the keys to a new home.

Habitat is also fully rehabbing eight vacant houses for new Habitat Partner Families in Fairfax in 2014.

To view the online story, please click here.

Please click here for Habitat for Humanity’s official press release prior to the event.

George Mehok Featured in 2014 Field Services Guide

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

HousingWire recently featured Chief Information Officer George Mehok and Safeguard in its 2014 Field Services Guide.

2014 Field Services Guide

As the largest company in field servicing today, Safeguard Properties will take care of hundreds of thousands of lawns this season. And that’s just cutting grass. Add in inspections, repairs, maintenance and cleaning, and the volume of its business becomes astounding – millions of vacant and foreclosed properties. But Safeguard was built with scale in mind, and a philosophy that combines intense customer focus with the technology to make it all possible.

“From day one, when Robert Klein started the company, he was investing significantly in technology,” said Safeguard CIO George Mehok. “He knew technology was going to be important to scale the business, and that we could only handle the volume through automation.”

That automation has included developing multiple mobile apps that allow staff and vendors to send and receive communication from the field. In July 2012, only 10% of inspections were done or processed by inspectors on a mobile device. That number is now more than 97%.

Now inspection requests are processed by a central system within minutes, and inspectors are routed to nearby homes. By clicking on the app on their smartphone the inspectors can answer questions at the property, and upload pictures in real time.

“We have seen fantastic results from investing in mobile, Inspectors are working much more effectively — their quality scores and on-time scores have taken off.” Mehok estimates that the new app cuts the inspection process down from days to minutes. “We’ve improved our timelines to clients as our contractors and inspectors dramatically improve their efficiency.”

Mehok’s favorite mobile innovation, however, is the Photo Direct app. When contractors take a photo of a property it is linked to a work order, and sent back to a home office. This app lets all parties see photos immediately, which provides quicker solutions to any questions.

For instance, if a contractor is sent to a home to evaluate a potential roof problem, a crew lead can look at the work order and photos right away, before the contractor leaves the property. This shared information leads to more accurate estimates. The integration with the work order makes all the difference.

“This is a clear example of technology improving quality,” Mehok said. “It changes the way these guys work and the end result again is that the time frame and quality for our clients has just improved.”

The information from these mobile apps also is integrated into the company’s MapAlert platform. This system, which Safeguard just deployed several months ago, combines geospatial mapping information and the data points from a number of internal and external sources, including all the work orders, inspections and pictures, and produces a source map for clients and Safeguard to reference.

For instance, if there’s an earthquake in one region, the company’s clients can look at MapAlert to view the affected homes, and evaluate from the data points what action needs to be taken. The data collected in the field will show the type of home, construction material, whether the utilities are on, if it’s occupied, etc. All of this informs Safeguard’s clients’ next steps, like whether it needs to send out a rush order for a new inspection, while giving clients transparency into the process.

The integration doesn’t stop there, however. When field quality control groups are sent out to inspect the work that was done by contractors, their pictures and data are added to the mobile file, and any discrepancies are quickly caught.

“It makes a tremendous difference because it’s an end-to-end control process focusing on those areas where the risk is the highest,” Mehok said. “This is a continually evolving quality-driven process as you find gaps in controls and errors, and then upgrade the controls and technology. That’s what we do on a daily basis.”

Please click here to view the guide in its entirety.

Mehok Talks About Big Data

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

The Wall Street Journal released a blog featuring George Mehok discussing Safeguard’s new analytic engine.

Property Firm Changes Business Model with Big Data

As a seemingly endless debate over the value of Big Data unfolds, CIO Journal caught up with George Mehok of Safeguard Properties to talk about the deployment of the property inspection company’s new analytic engine—which he says has been the foundation for an entirely new operating model.

Mr. Mehok, formerly an executive at Verizon Wireless, is now CIO of Safeguard, in Valley View, Ohio, which helps banks keep tabs on the physical condition of properties after mortgage holders become delinquent or go into foreclosure. Robert Klein, a former New York taxi cab entrepreneur, launched the privately held company in 1990 in a basement office near Cleveland, with just two employees.

Safeguard has changed considerably over the last 24 years. It now has 10,000 workers and commercial relationships with more than 100 financial institutions, including all the major mortgage lenders, according to Mr. Mehok. The business has become much more data-intensive, too. Those mobile workers use phones and other devices to take pictures of the properties that they inspect, which has helped drive an exponential increase in the volume of data that the company uses. At the end of 2013, Safeguard had two petabytes of data, up from one petabyte in 2012, according to Mr. Mehok.

Yet the biggest change, he says, is the way the company uses data, and the way that data has changed the business model. “I think Big Data is going to lead to major changes in the business and help lead to better decisions,” he said.

Traditionally, the company sold clients spreadsheets that listed the addresses of properties that might be the most at risk of an upcoming weather event, such as a storm. The client could have the property boarded up, or if the report occurred following an event, have it inspected.

That began to change in January, when the company launched a new analytic platform that is available over a private cloud to all of its clients on a trial basis. The geospatial mapping tool integrates data from a variety of sources, including weather reports and warnings about impending events such as floods or earthquakes. The tool, developed by Critigen, in Denver, is available to clients on a self-serve basis over the Web, and in real-time. The new system “is much faster and more precise,” Mr. Mehok said. Several dozen institutions have given it a try, but there are hundreds of individual users, because information can be distributed broadly within a client company.

The change in the operating model is only the first order of change, though. Looking ahead, Mr. Mehok predicts that the analytic engine will help Safeguard’s clients develop new products and services. For example, the mapping tool can help clients visualize the location of properties in relation to bank branches, something that isn’t obvious when that information is stored in traditional databases. “Our clients will be able to leverage the geospatial mapping to serve their own customers better,” Mr. Mehok said.

Given that the trial is only one month old, it’s still too early to know what sort of financial impact the technology will have on Safeguard or its clients. But one thing is clear: data is leading to basic changes in the way that they go to market.

Please click here to view the online blog.

Crain’s Cleveland Business blogged about Mehok’s interview. Please click here to view.

How Jaffa Doubled the Growth at Safeguard

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

Smart Business recently published an article about CEO Alan Jaffa doubling the growth at Safeguard.

Staying true to the core – How Alan Jaffa has doubled the growth at Safeguard Properties

The recent real estate crisis has left cities, towns and neighborhoods with real potential as well as real problems. Alan Jaffa and Safeguard Properties see both the potential and problems as growing business opportunities.

Founded in 1990 by Robert Klein, Safeguard Properties has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest to the largest mortgage field services company in the country today.

“I’m not going to dismiss the fact that the housing crisis had an increase in our volume,” says Jaffa, who became Safeguard’s CEO in May 2010. “Some have said, ‘Wow, Safeguard. You got into this business at the right time.’ We’ve been in this business 24 years and we’ve seen growth every year. We’ve seen growth over the last handful of years due to new clients, an acquisition and an increase in volume because default rates have gone up.”

Providing services in all 50 states, the Virgin Islands and Puerto Rico, Safeguard employs 1,700 people and is supported by a nationwide vendor network trained and qualified to perform a full range of inspections, property preservation services, maintenance work, and repair and rehab services.

The more than $1 billion company sits atop its industry, and Jaffa is continuing to find ways to keep the company in the No. 1 spot.

“The timing of the shift of me becoming CEO was an interesting time in our industry,” Jaffa says. “Safeguard has always had phenomenal growth, but during the mortgage crisis our growth certainly spiked. A year ago we did an acquisition that gave us substantial growth as a company that continues what this business was really built on, staying true to the core of what it is that we do.”

Now Jaffa is building off that momentum and looking toward the future.

Find new opportunities

While Safeguard was anything but lacking growth, Jaffa knew there were chances to grow the company in new ways. In 2012, Bank of America offered Safeguard that chance.

“Bank of America, through its Countrywide Financial Corp. acquisition in 2008, acquired a field service company that conducted similar processes to what we do, but strictly for Bank of America,” Jaffa says. “BOA has been divesting itself of many of those acquired affiliates, and we purchased their field service company, Bank of America Field Services, in September 2012.”

Bank of America needed to ensure that it was partnering with the right buyer, since the deal would be a long-term relationship.

“BOA viewed us, as others do, as the industry leader,” he says. “When it came to protecting and preserving their assets, they wanted a partner, and hence sold their field service company to the industry leader.”

From a volume perspective, gaining Bank of America as a client has almost doubled the size of Safeguard.

“The acquisition created a buzz and energy in this company that was different than what our typical growth has created before,” Jaffa says. “Now that we’ve done this acquisition, and it has doubled our business, we can’t lose focus of Safeguard Properties and what it is that we do here.”

The Bank of America acquisition was the first that Safeguard has done. The company has built its growth through customer service, relationships and organic growth.

“Our growth has been through the reputation that we have built for ourselves and gaining additional clients,” he says. “That is how we have continued to see growth. Of course, we have expanded our services. Twenty-four years ago, the services may have been a lot smaller in scope of what we do today for our clients, but we are still very focused on the property and preserving and taking care of that property.”

Like anything else, the needs of Safeguard’s clients and of this country when it comes to housing have grown. The company continues to support those needs while determining what it needs to do next.

“It comes down to surrounding yourself with the right people, and people who are smarter than you are,” Jaffa says. “This company would not have had the growth that it has had without having the right people in place.”

Jaffa says another key is staying true to your core values. Despite how much Safeguard has grown, Jaffa isn’t straying from those values.

“We’ve become a large company,” he says. “Walking in here every morning and leaving at night, I never let it get to my head that we’ve become so large. I know I am the same person walking in here every morning, and I’m the same type of person walking out as I was 19 years ago. Sometimes you see too many executives who let that get to their head, and you can’t let that happen.”

Growing pains

Despite Safeguard’s ability to grow each year and work its way to the top of its industry, the company has still faced challenges. With so many of its employees out in the field, technology has been one of its biggest.

“Technology for us has been phenomenal,” Jaffa says. “However, every six months technology becomes outdated, and keeping up is a challenge. As a company we have been extremely aggressive in our budgeting and spending to be in front of technology, because it is a huge driver for us in order to continue on the path we are on.”

Technology can be your biggest friend or your biggest challenge. It’s all on how you attack it.

“We can’t get our job done unless the people in the field get the work done,” he says. “The days of paper are long gone. We are in an environment today where we expect responses from people at properties in the field. The mobile technology is tremendous in our space. Real-time data from the properties is what we’re working on, and some of that is in place today.”

Safeguard’s mobile technology enables the company to get quicker responses from the field, quicker responses to its clients and quicker reactions from investors, which ultimately protects and preserves a property.

“It’s a win-win for everybody,” Jaffa says. “The old days of you telling me a condition and it bouncing around to different people could have been a 14-day process. We’re in an environment where neighbors, cities and our clients want real-time resolution, and the only way you’re able to do that is if we’re able to communicate from the field.”

Staying on top

While Safeguard has done the things to make it No. 1, its position in the industry means others are biting at its heels trying to dethrone the company.

“Every industry has competition,” Jaffa says. “You stay No. 1 by staying true to what you set yourself out for. We didn’t become No. 1 because of our looks. We became No. 1 because of our creative thought process, being in front of issues before they became issues and giving our clients the level of service that they required.

“Competition is healthy. It keeps everyone on their toes. We’re in an environment where everybody wants options and we’re going to keep doing what we’re doing and our competitors are going to keep doing what they’re doing. As long as we stay true to what we started this company out as we’ll be fine.”

One of the differentiators is how Safeguard has partnered with and built relationships with local communities where the company works.

“Our competition continues to try to follow that model, but it’s more reactive from their standpoint rather than proactive from our standpoint,” he says. “Some of the largest cities in this country know us and know they can pick up the phone when there is an issue at a property and that we’ll take care of it immediately.

“People think it’s just foreclosures, but we’re really protecting neighborhoods against vacant blight, against unsecured, unsafe properties around this country. If we weren’t around, the country would be in a lot worse shape than it is with the horrible housing crisis that we’ve had.”

According to Safeguard, tens of thousands of dollars in home value, up to 30 percent of the value of the home, can be negatively impacted by a vacant property on the street. When those properties have problems, it can negatively impact the tax valuations and become a bigger burden on the municipalities.

“When these homes are protected, it upholds the value because it doesn’t negatively impact the surrounding properties and cities aren’t sending someone to cut the grass or deal with the code enforcement violation,” Jaffa says. “It lessens the financial burden on municipalities’ budgets.”

As the housing crisis continues to fix itself, Jaffa and his team at Safeguard are once again looking for the next growth opportunity.

“One of the things that we are very aggressively contemplating is doing additional acquisitions,” he says. “Between our people, systems and our network there are a significant amount of opportunities for us to take advantage of and diversify.”

Takeaways

Take advantage of opportunities outside of organic growth.
Tackle challenges head on and always be looking at what’s next.
Build your business by staying true to the values it was founded on.

The Jaffa File
Name: Alan Jaffa
Title: CEO
Company: Safeguard Properties

Born: Brooklyn, N.Y.

Education: He took college courses but did not earn a degree.

What was your first job and what did you learn from it? I ran a freight elevator at a Wall Street building that my uncle managed. As a 16-year-old kid, I had the fortune to interact with a lot of business people. What struck me was that some of the most powerful people were also the most humble. They took the time to talk and show respect to everyone, regardless of their role or status. That’s always stuck with me.

What is the best business advice you have received? Surround yourself with the best people and trust them to do their jobs. Nobody knows everything, and the more you can rely on smart and talented people, the more successful you’ll be.

What do you see as the most important thing Safeguard does for a property? What happens to one property happens to the neighborhood and community in which it exists. When we protect the value and condition of one home, we protect the value and quality of the neighborhood.

If you weren’t a CEO, what is something you have always wanted to do? What I enjoy is talking to budding entrepreneurs who are looking for guidance to start or grow their companies. We have a lot of talented people in this community with good business ideas. It’s gratifying to offer some perspective, and I find I learn a lot too.

Learn more about Safeguard Properties:

Facebook – https://www.facebook.com/pages/Safeguard-Properties/142091379162518
Twitter – https://twitter.com/safeguardprop
YouTube – https://www.youtube.com/user/SafeguardProperties1/videos?view=0&flow=grid
LinkedIn – http://www.linkedin.com/company/56505?trk=tyah

How to reach: Safeguard Properties, (800) 852-8306 or www.safeguardproperties.com

Please click here to view the online article.

Robert Klein Looks Back at VPR Ordinances

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

In its October issue, Servicing Management published an article authored by Robert Klein, founder and chairman of Safeguard Properties, titled Vacant Property Ordinances: A Look Through The Rearview Mirror.

Vacant Property Ordinances: A Look Through The Rearview Mirror

To minimize the impact of vacant and abandoned properties, municipalities have been enacting vacant property ordinances.

Major national news outlets and mortgage industry trade media often refer to 2008 as the beginning of the housing market crash, without citing a particular flashpoint. Signs of a market slowdown certainly were apparent before then, primarily in the subprime market. But by 2008, the meltdown had expanded to the prime market, and that year, Congress responded with its controversial bailout package with hopes of stemming the problem.

Of course, we know the housing crisis didn’t subside; it got worse. Through 2009 and beyond, the fallout continued as credit tightened, businesses cut spending and unemployment climbed to more than 10%. Homeowners with historically strong credit scores began to fall behind on their mortgages and faced foreclosure. Borrowers whose home values fell below their mortgage balances abandoned their homes. New construction of homes and condominium units, especially in seasonal communities, went unsold. Even lower-value homes with no mortgages were abandoned when owners and heirs found them to be more expensive to maintain than they were worth.

All of this contributed to even greater numbers of vacant and abandoned properties across the country. How many is anybody’s guess, as estimates range from 10 million to 18 million, depending on the source and the timing of data. Regardless of the actual number, what is not in dispute is that municipalities across the country continue to struggle under the weight of vacant and abandoned properties, even as the housing market begins to stabilize.

In many municipalities, these properties stress municipal budgets, negatively impact home values, and thwart government, community and private-sector efforts to revitalize once-thriving neighborhoods.

Among the strategies to minimize the impact of vacant and abandoned properties has been the enactment of vacant property ordinances. In 2008, a vacant property registration committee was created for the Mortgage Bankers Association, where the concept for this type of ordinance was fully developed. The committee brought together industry representatives to discuss the impact of these rules on the property preservation world and recommend more workable alternatives for both cities and servicers.

Five years ago, we began tracking the existence of 50 to 60 municipal ordinances. Today, we track more than 1,300 separate ordinances, as well as statewide vacant property registries in the states of Maryland, Georgia, Connecticut and New Jersey.

The degree to which vacant property ordinances and registries have been effective is open to debate. The answer depends on many factors, including the specific requirements of each ordinance, the fees generated and what the municipality hoped to achieve by enacting an ordinance in the first place.

The entire field services industry understands the value of vacant property ordinances to protect communities from the blight that untended properties can create. Every day, we witness firsthand the damage, criminal activity, safety issues, neighborhood decline and other problems associated with vacant properties, even among vacant properties that receive regular inspections and maintenance services.

Not only do we work to assure that our mortgage servicing clients comply with all local ordinances, but we have provided input from a field service perspective to numerous municipalities that were crafting vacant property ordinances.

It is useful to look back at the evolution of vacant property ordinances over the past five years in an attempt to understand what this evolution means for the mortgage industry and communities alike.

The evolution of ordinances

Five years ago, we witnessed municipalities enacting vacant property ordinances to address the most basic problem for code enforcement officials: the inability to locate a responsible party when issues arose because county property records, tax databases and other sources often were out-of-date or inaccurate. Vacant property ordinances allowed for the creation of registries and databases with updated contact information on individuals and entities responsible for vacant properties. The fees and penalties that were levied for failure to comply with the ordinances covered the administration costs.

As the housing crisis grew, so did the economic problems for cities across the country. Greater numbers of vacant properties further taxed the fragile resources of police, fire and city service departments responding to crimes, neighbor complaints and other problems at vacant properties. Compounding the problem, tax revenues fell as more residents lost jobs and property values declined.

Some cities considering vacant property ordinances began to view them as a potential source of new revenue. As a result, in 2009 and 2010, we began to see more ordinances with higher registration fees and stiffer penalties for failure to comply.

Today, annual registration fees for each vacant property a servicer has in a particular city can range from $10 to $500, and penalties can reach $1,000 per day or more for failure to comply with ordinance requirements. One city in Ohio recently began requiring mortgage companies to post a $10,000 bond for each vacant property – not only “bank-owned” properties, but also defaulted properties still in title to the homeowner.

Whether these fees and penalties have generated sufficient revenues for cities to cover the administrative expenses of the program – and whether they have made a difference to improve or maintain the condition of a vacant property – is difficult to determine.

Anecdotally, we have heard that cities administering their own programs often find it difficult to adequately staff the function. Therefore, because they are not able to enforce the ordinance completely, they are not generating the revenues they expected.

Other cities that utilize third-party services to administer the program have earned revenues because they receive a percentage of what their provider generates. The irony, however, is that the revenues have come largely from mortgage servicers who already maintain their vacant properties and readily comply with the ordinances. Irresponsible owners remain difficult to track down, so not only are they not complying with the ordinances, but they are still not maintaining their properties. In other words, the programs may be generating income for the cities because of responsible servicers who not only comply with the ordinance but already maintain their properties. Yet, irresponsible property owners continue to fall through the cracks, both in terms of property maintenance and registering their properties with the city.

Many of these third-party services also specifically target servicers because the trigger is the filing of a notice of default. Foreclosure does not cause blight; vacancy does. Vacant property registrations with triggers of a notice of default do not address the problem.

Another development in vacant property ordinances was that, as problems with vacant properties grew, many municipalities attempted to protect vacant properties by unknowingly imposing requirements that actually had the potential to do more harm than good. Examples include suggested requirements that vacant properties be lighted, that metal covers be used instead of plywood boarding to secure windows and doors, that notices of vacancy and contact information for the property be posted on signs large enough to see from the street, and that in ground pools be maintained with fresh water, rather than covering the pool to protect it.

Fortunately, municipalities have begun to seek guidance from the mortgage servicing and field servicing industries to remove these types of requirements. More cities now understand that properties still in title to a homeowner do not have electricity because power has been turned off; therefore, lighting is not practical. Also, lighting a vacant property or posting large notices may actually attract more crime, alerting vandals to the fact that a property is empty, just as metal covers on windows and doors actually expose a vacant property to greater harm because thieves can steal the metal and sell it.

Similarly, filling a swimming pool at a property still in title to the homeowner is not viable because the water has likely been turned off. More importantly, however, an uncovered pool at a vacant property is a dangerous invitation for children and teenagers, whereas a pool cover provides a much safer deterrent.

Still, five years into the mortgage crisis, controversy remains with regard to vacant property requirements on mortgage holders that do not distinguish between pre- and post-foreclosure properties, making mortgage holders equally responsible for pre- and post-sale properties, even though they do not have legal title prior to the foreclosure sale.

In fact, the Federal Housing Finance Agency (FHFA) recently won a lawsuit against the City of Chicago, filed in December 2011, on that issue. In its lawsuit, FHFA, as conservator for Fannie Mae and Freddie Mac, claimed that the failure of the Chicago ordinance to recognize the distinction between the presale and post-sale status of properties increased the liability for those entities and potentially for taxpayers. A federal judge ruled that Fannie Mae and Freddie Mac could continue to follow their own guidelines “to maintain the properties in a manner to preserve their value” instead of following Chicago’s vacant property ordinance requirements.

Alternatives to ordinances

A major issue with vacant property ordinance requirements has been that they vary significantly from city to city. As the numbers of ordinances grow, it becomes increasingly difficult for servicers to comply with each ordinance. Today, we are aware of about 1,500 different municipal ordinances. Depending on the source and how a city or town is defined, estimates are that 20,000 to 25,000 municipalities exist across the country, so the potential for thousands of more ordinances, each with a new set of unique requirements, is very real.

A major step forward to assure that mortgage servicers and their field service representatives maintain compliance with ordinances would be the adoption of more statewide vacant property ordinances. These would allow cities and towns in each state to agree on requirements that recognize different geographical and community needs, while creating greater uniformity, both for servicers and municipalities.

In the meantime, municipalities and code enforcement departments already have access to a nationwide resource that helps connect code enforcement officials and mortgage servicers to proactively manage code violations. We developed the Compliance Connections system in response to the basic challenge that code enforcement departments lacked up-to-date databases to locate a responsible party at a vacant property when issues occurred. The system has helped hundreds of code enforcement departments work with servicers to address and resolve tens of thousands of code violations quickly and efficiently. And municipalities can use it for free.

If we learned one thing in five years since the housing crisis erupted, it is that we all need to cooperate to resolve our problems. Creating more uniformity in vacant property ordinances is a good place to start.

Robert Klein is founder and chairman of Safeguard Properties. He can be reached at robert.klein@s.safeguardproperties.com.

Please click here to view the article in PDF.

Safeguard Supports Slavic Village Recovery Efforts

Posted on September 13, 2018October 4, 2018 by Safeguard

In September, Safeguard supported the ongoing efforts to clean up blight and revive Slavic Village; a collection of neighborhoods in Cleveland, OH. Slavic Village Recovery LLC, comprised of Forest City Enterprises Inc., RIK Enterprises, Slavic Village Development Corporation and Neighborhood Progress Inc., plans to restore and sell up to 200 empty houses in the village over the next three years. Several media sources picked up the story:

NBC News: http://www.nbcnews.com/id/53096018/ns/local_news-cleveland_oh/t/slavic-village-homes-be-renovated/

The Plain Dealer: http://www.cleveland.com/business/index.ssf/2013/09/slavic_village_devastated_by_t.html

19 Action News: http://www.19actionnews.com/story/23517075/slavic-village-recovery-unveils-first-rehabilitated-home

Newsnet5.com: http://www.newsnet5.com/dpp/news/local_news/better_neighborhoods/300-homes-in-Clevelands-Slavic-Village-to-be-renovated-over-three-years-bringing-in-young-families

Kathy Cogan Explains how Safeguard’s Management Training Delivers Results

Posted on September 13, 2018October 4, 2018 by Safeguard

On August 1, MortgageOrb published an article authored by Safeguard’s Kathy Cogan, assistance vice president of account management, titled Safeguard Properties’ Management Training Program Delivers Results.

Safeguard Properties’ Management Training Program Delivers Results

Successful companies are good at not only hiring talent but also developing strong employees into effective leaders. According to the American Society of Training and Development, U.S. businesses spend more than $170 billion on leadership-based programs annually.

But in little-known industries, such as mortgage field services and property preservation, few, if any, outside programs offer industry-specific courses to help build the technical skills and field knowledge that employees need as part of their leadership development. As a result, these industries must supplement leadership development with creative alternatives.

One alternative is a concept called rotational training. In a rotational training program, promising leadership candidates learn a business hands-on by working in virtually every department of the company. They cycle through a process that allows them to experience how business decisions affect different departments within the company, and they develop a better understanding of the industry as a whole.

Safeguard Properties’ rotational training, called the Management Training (MT) program, recently celebrated its 10th anniversary. Since the program’s inception, many leaders have emerged to serve as role models for new leaders at all levels, and to support the company’s growth and expansion.

The Concept

In 2003, Safeguard was a 13-year-old company that was consistently growing and hiring. Typically, new employees would receive a company overview and ongoing training related to their departments and positions. But company executives realized it would take these new employees a long time to learn all aspects of the business, and even then, their knowledge would be limited to only things that affected them in their day-to-day job functions.

Safeguard wanted to design a training program that would eliminate departmental silos – a program that helped identify employees’ strengths, groomed them for leadership positions, and provided them with a deep understanding of the company and the field services industry. The company also wanted a program that would give employees a better understanding of the inter-relationships between departments.

For example, potential leaders who work in property preservation and deal with properties in pre-sale need to understand the potential impact their decisions will have on those same properties when they reach the post-foreclosure sale status, or the real-estate owned (REO) stage. Because the foreclosure process can take a long time – sometimes up to two years in certain states – property conditions can deteriorate no matter how well a property is being maintained. A decision not to repair a minor roof leak may become a costly mold issue in REO. An effective leader must understand these issues and guide the client to make the best decisions to uphold property value and condition.

Program Overview

The MT program begins with hiring college graduates and identifying strong candidates to fill positions of influence within Safeguard. The candidates spend a year learning about each department or service line and experiencing all job functions – giving them a better perspective of the company and the field services industry as a whole.

Each department rotation lasts six to 10 weeks, depending on the needs of that department or service line. MT candidates are exposed to extensive department-specific training and must successfully complete all job functions, in addition to participating in special projects and presenting ways to streamline business procedures. The MT candidates must learn how every position functions, how it fits into that department and, ultimately, what role it plays within the company.

Areas of training include property preservation in pre-sale, customer service, vendor management, REO, hazard claims, community initiatives, marketing, quality assurance, client resolution, estimates and repairs, inspections, accounting, and all other departments within Safeguard.

Once the MT candidates complete training, they must perform each job function. This can include updating, customer service or handling client accounts. Before candidates can move to the next job function, they must pass a quality control test performed by Safeguard’s quality assurance team.

Additionally, MT candidates are assigned special projects or asked to analyze best practices and procedures and propose new solutions. They also contribute to Safeguard’s vendor and industry conferences.

Mentoring

MT candidates are assigned a mentor from a committee that manages the program. That committee is made up of executives and members of senior leadership. The mentors offer candidates better perspective on the Safeguard culture and guide them throughout the rotational training process.

MT candidates also function as mentors themselves. Once they complete the program, they become role models to other staff in the departments they join. They provide support and offer guidance to other employees based on the extensive knowledge and experience they gained from participating in the MT program.

Client Interactions

One of the most important aspects of the MT program stems from the core of the Safeguard culture by focusing on the company’s motto, “Customer Service = Resolution.” Each MT candidate is assigned a client to interact with to learn to anticipate their needs and address any challenges.

These interactions take place in one-to-one calls between Safeguard staff and their client counterparts and sometimes during site visits to clients’ offices. The calls ensure that Safeguard personnel stay connected to clients. The calls encourage MT candidates to identify client issues and suggest solutions. They learn first-hand the value of good customer service and the role it plays in Safeguard’s success.

The MT program has proven to be very successful for Safeguard for the past 10 years and continues to evolve to support the company’s rapid growth. Today, 15 leaders who have graduated from the program serve in key management roles to direct projects, analyze business procedures, build relationships with clients and provide guidance for other employees. The program will remain one of the company’s most valuable training resources.

Kathy Cogan is assistant vice president of account management for Safeguard Properties, the nation’s largest mortgage field service company. She also is a member of Safeguard’s inaugural Management Training (MT) class and serves on the MT committee.

To view the online article, please click here.

Jennifer Jozity Links Technology with Property Inspections and Risk

Posted on September 13, 2018October 4, 2018 by Safeguard

In the August issue of Mortgage Banking Magazine, Safeguard’s Jennifer Jozity, assistant vice president of inspection services, authored an article titled Wiring the Business of Property Inspections.

WIRING THE BUSINESS OF PROPERTY INSPECTIONS

One of the most visible flashpoints that increases the potential for risk is vacant defaulted and foreclosed homes that raise public concerns in neighborhoods and communities across the country.

Each month, Safeguard Properties performs occupancy inspections on nearly 2 million defaulted properties nationally. These are properties for which mortgage payments are more than 45 days late.

The sole purpose of the inspection is to verify the occupancy status and condition of the property, and report that information to the servicer.

On average, Safeguard’s internal records show that 15 percent to 20 percent of defaulted properties for which the company performs occupancy inspections will eventually be found vacant or abandoned by their owners.

Similarly, a June report by Irvine, California–based RealtyTrac Inc. found that approximately 20 percent of all U.S. properties in the foreclosure process had been vacated by owners prior to the foreclosure sale.

Mortgage companies are in a classic Catch-22 situation relative to vacant properties in their mortgage portfolios that have been abandoned by owners but have not gone through the foreclosure process. Failure to identify and secure abandoned properties in a timely manner can expose these properties to vandalism, damages and other events that can contribute to deterioration in condition and value. In many municipalities, servicers also are subject to severe fines and penalties for failure to protect vacant properties in their portfolios.

On the other hand, securing a defaulted property in error, believing it to be vacant, can expose a mortgage servicer, its field service vendor and the contractor performing services to potentially significant financial and legal liability, not to mention reputational risk.

To reduce these risks, Safeguard Properties designed and built its own INSPI^® Mobile system for use by its inspectors in the field. It works with any mobile platform an inspector chooses—a tablet, iPhone^®, iPad^® or Android^TM device.

The best way to demonstrate some of the risk-reduction benefits of Safeguard’s mobile application is to follow two examples in action.

Identifying a vacancy
Our first inspector is Dave. At the start of his day, he grabs his iPhone, uploads his work orders from Safeguard and uses the mobile application to prioritize his route based on the due dates, urgency and other factors identified in the system. He uses the GPS embedded in the system to plan the most efficient route.

Dave visits a brick ranch-style home. He has inspected it before, and it was occupied. Today he observes that the lawn isn’t mowed. Newspapers are piled on the porch. The utilities are turned off. A neighbor tells Dave the owners moved out a few weeks ago.

A comprehensive script built into the system prompts Dave through the process.

When he reports the vacancy, a special alert appears on-screen. It lets Dave know that the vacancy status requires additional information and additional photo documentation to support his observation. It reminds Dave to affix a vacancy notice sticker with Safeguard point-of-contact information for code enforcement officers, real estate agents or others who may visit the property.

Dave uses the embedded camera feature to snap the required photos and tag them with proper descriptions. He immediately transmits his report to Safeguard from the field. The work order is reviewed, the mortgage servicer is notified of the vacancy and orders are set in motion to secure the property.

Not only was this property secured two days sooner because of the immediate property report sent from the field, but the system ensured that Dave thoroughly documented evidence of vacancy before a property preservation contractor would be sent to the property to confirm the inspector’s findings and take steps to secure the property.

Change in property status
The second inspector we want to tag along with is Joe, who is midway through today’s inspection route. Throughout his day, at the request of the mortgage servicing client, when Joe visits an occupied property he leaves a discreet envelope that includes a contact card from the servicer as part of its defaulted borrower outreach. The card provides a phone number for the homeowner to call to discuss payment issues and seek assistance.

While Joe is on his route, the mortgage servicer sends Safeguard an update that the homeowner of one of the properties on Joe’s inspection list has filed for bankruptcy. The bankruptcy status means the servicer can no longer attempt to make contact with the homeowner.

Through the mobile application, Joe receives an immediate status update that tells him only “no contact” inspections are to be conducted at this property. He should not leave a contact envelope. Joe is able to comply immediately with the updated requirement.

The mobile application immediately notifies an inspector of any property status update that can either change the type of inspection he performs or cancel it altogether.

In addition to a notice of bankruptcy, updates are made when a loan becomes current and the homeowner no longer is in default, when a property is conveyed or sold to a third party or when a homeowner enters into a loss-prevention program with his or her mortgage company.

Built-in quality and protection
Beyond ensuring that inspections are thorough and that inspectors proceed accordingly, depending on the most current status of the property, the INSPI Mobile system builds quality and protection into every step of the inspections process.

Because the mobile system was built by Safeguard, it is fully integrated into the company’s internal system, providing access to property information for verification and accuracy, with embedded security and firewalls to protect the security of data.

This is especially important to help ensure that inspectors are at the correct property location. Especially in rural areas, property addresses are not always obvious, and it is imperative that inspectors find the right property. The mobile system helps them do that.

If an inspector, for example, reports that he is at a blue, vinyl-sided colonial, the system will immediately send an alert if the last inspections report showed that the property was a white bungalow. The inspector can use the information in real time to identify the correct property.

Safeguard’s internal system stores every bit of data history on a property. It stores the color, siding material and property style, as well as the number of garages a home has and whether out-buildings such as sheds and barns are present.

It prompts inspectors to identify and report broken windows and other security breaches so that these can be remedied immediately. When clients have special requirements for photos and other documentation, the system ensures they are followed.

Beyond using data to improve the quality and accuracy of inspections, Safeguard mines the data gathered from every inspection report to identify and predict trends and deploy resources more efficiently. We also provide data to our clients to assist with their property evaluation, management and disposition strategies. For example, data may help identify a need to expand an inspections network in a particular area or to help a mortgage servicer predict where larger numbers of mortgage defaults may occur.

In an ever-growing mobile society, virtually every business is becoming an eBusiness. The mortgage field services industry is no exception.

As we continue to view ourselves that way, leveraging automation, mobile technologies and other applications will ensure that our inspectors and contractors in the field hold one of the most effective tools to minimize property risk right in the palm of their hands.

Jennifer Jozity is assistant vice president of inspection services at Safeguard Properties, Valley View, Ohio. She can be reached at jennifer.jozity@s.safeguardproperties.com.

To view the article in PDF, please click here.