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Safeguard Discusses High Hopes in Ohio

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

High Hopes in Ohio
Derelict Cleveland neighborhood is targeted as a model for community revitalization.
By Robert Klein

It’s a basic economic principle that when supply exceeds demand, prices go down. Housing prices in the U.S. continue to decline because the supply of available properties far exceeds the pool of potential buyers. In many neighborhoods, the problem is further exacerbated by the presence of deteriorated, vacant, and abandoned properties that have lost most of their value and negatively impact the value of surrounding properties.

The S&P/Case Shiller 20-city home price index in November 2011 showed that property values in the United States had fallen 3.7 percent since November 2010 and 33 percent since 2006. In a February 2012 article citing that report, the Wall Street Journal observed that the data included foreclosed properties that sold at lower prices than their previous sales because of deterioration and poor maintenance.

It is a scenario that plays in communities across the country. Home values in what were once solid middle-class neighborhoods that epitomized “pride of ownership” fell because of the growing presence of vacant and abandoned properties. As the numbers of neglected and decaying properties increases more homeowners with negative equity in their homes simply abandon them. By the time these abandoned homes move through the foreclosure process, which can take months and even years in some states, they too deteriorate and lose much of their value. Low-value properties often become nuisances and eyesores in their neighborhoods and negatively impact the housing values of surrounding properties. Even worse, they deter prospective homebuyers from moving into the neighborhood, further perpetuating the cycle of foreclosure and declining property values.

To reverse that cycle, a comprehensive approach is required to address three critical needs: 1) demolition of substandard and unsalvageable properties; 2) possession and rehabilitation of vacant properties; and 3) assistance for existing homeowners in distress. All three strategies must be undertaken simultaneously.

A Pilot in Development
The Slavic Village neighborhood of Cleveland, Ohio, became the face of the nation’s housing crisis in 2007 when it experienced the highest foreclosure rate in the country. Today, it and many communities like it have reached a tipping point. They retain a strong core of residents, businesses, civic leaders, churches, and neighborhood organizations committed to revitalization. With a solid plan of action, these com-munities can be saved. Without one, the cycle of decline will continue.

Because of its potential for redevelopment, a pilot project is being planned for Slavic Village that could become a model for other communities. It is a collaboration between the community development organization, Slavic Village Development, the mortgage servicing industry and investors, and Cleveland-based national companies Safeguard Properties and Forest City Enterprises, each with a strong commitment to community development and revitalization.High Hopes in OhioDerelict Cleveland neighborhood is targeted as a model for community revitalization.

It also will involve participation from the city of Cleveland, Cuyahoga County, the county’s land bank, neighborhood development organizations, credit counseling agencies, and the mortgage servicing industry.

The pilot will simultaneously address the need for demolition, property rehabilitation, and homeowner assistance. The strength of the program is that it takes a wide view to assess the needs and develop action plans for large blocks of properties within an entire community rather than a “one-off” approach that fails to make an impact.

A target area of 2,216 homes, among approximately 9,000 housing units in Slavic Village, was selected for the pilot. Approximately 1,942, or 88 percent, are occupied and 274, or 12 percent, are vacant.

Demolish What Can’t Be Saved
Until unsalvageable vacant and abandoned properties can be demolished, the rebuilding process can’t begin. The very presence of these properties saps the life out of the neighborhood. They are eyesores and nuisances that attract criminal activity. Many have been stripped of their plumbing, siding, furnaces, woodwork, lighting, and anything that gave them character. They are beyond repair, and nobody will invest in them. Worse yet, nobody will invest in the properties around them until the eyesores are gone.

Demolition doesn’t shrink communities or reduce the supply of existing housing. It eliminates nuisance structures that hold back redevelopment. This is why the first step in the pilot is to identify unsalvageable properties and obtain the funding necessary to demolish them. Under the pilot, approximately 64 homes were identified for demolition because they were found vacant, unsecured, and in unsalvageable condition. Once a detailed analysis of vacant and boarded properties has been completed, more properties may be added to the demolition list.

Once these properties are demolished, the vacant land can be transformed in various ways. Some will become green spaces and infrastructures for streetscapes, bike lanes, walking trails, community gardens, and other amenities. Neighbors next door to vacant land will have the opportunity to expand their yards. Other properties will be conducive for commercial development.

Funding for the demolition will be sought in partnership with the city of Cleveland, the Cuyahoga County Land Bank, and mortgage servicers. Green space and infrastructure partners will include the city of Cleveland, neighborhood development organizations, foundations, and other governmental and community agencies.

Rehab Properties to Sell or Rent
The pilot will rely on the private sector to rehabilitate vacant properties to provide safe, well-maintained, and affordable housing for rent or purchase.

Under the pilot, approximately 200 vacant properties will be identified for rehabilitation. Once repaired and remodeled, the homes will be available for direct purchase or through a lease-purchase for homeowners who either do not qualify for loans or who are working to repair their credit. Homes in need of modest repairs may also be marketed at a lower cost to qualified “do it yourselfers” who can demonstrate the financial ability to make needed repairs. A key component of this phase also will include credit counseling to help homeowners become and remain fiscally responsible.

Safeguard Properties will oversee the repair and remodeling of homes to ensure work meets established standards for quality, timeliness, and budget. This will help assure homebuyers—especially first-time homebuyers—that they will not incur major unexpected expenses on their homes for a reasonable period. Unexpected and expensive repairs, or repair work done improperly, are major reasons why many homeowners either fall behind on their mortgages or their homes fall into disrepair.

Financing, property management, credit counseling, loan assistance, and related services will be done in partnership with Slavic Village and neighborhood housing agencies.

Although not part of the pilot, it is important to note that a major contributor to the deterioration of vacant properties is the fact that Ohio has one of the longest foreclosure processes in the country. When properties are occupied, an extended foreclosure process makes sense to give homeowners time to work out their finances and keep their homes. However, when homes are vacant and abandoned, there is no homeowner to protect. Until the foreclosure can be completed, a servicer, a land bank, or other entity can’t take legal possession or assume full responsibility to repair a property and get it reoccupied. The longer a property sits vacant, the greater the risk that it will deteriorate, lose value, and negatively impact surrounding properties.

This is why Ohio is among the states considering legislation to accelerate vacant and abandoned properties for foreclosure. This will help to protect the condition and value of properties, especially those in neighborhoods such as Slavic Village, with older housing stock that provides affordable and decent housing for first-time homebuyers and people with modest incomes. The more vacant properties the coalition can protect and preserve, the more housing it can make available to people who might not otherwise have the opportunity to own a home.

Assist Distressed Homeowners
Helping distressed homeowners remain in their homes is critical to reduce the numbers of vacant and abandoned properties and uphold property values. The Slavic Village pilot includes two initiatives to help existing homeowners who are in financial distress. One offers assistance with home repairs. The other assists with loan modifications.

It is estimated that 10 percent of occupied homes in Slavic Village require repairs to correct code violations. Many homeowners, especially the elderly, simply do not have the financial or physical ability to make repairs. Under the pilot, financial support will be sought through foundations and other organizations to help an estimated 170 homeowners in the target area make needed repairs to bring their properties up to code and protect their condition and value. This will be coupled with code enforcement action to ensure that homeowners follow through with the needed repairs.

Pilot partners with Slavic Village development for this portion of the initiative will be the city of Cleveland, foundations, and neighborhood housing agencies.

Approximately 25 percent of homeowners in the community—about 266 within the target area—are believed to require some type of loan modification, either because they are in serious default their mortgages are underwater, or they have high-risk loans.
Under the pilot, these homeowners will receive loan modification assistance. This assistance will come through neighborhood housing agencies and mortgage servicers.

A Vision for the Future
In many ways, the vision for the future of Slavic Village is to return to its not-so-distant past. In the 1990s, it was a thriving blue-collar community. Its population was growing even as other neighborhoods in the city were declining. It offered affordable and well-maintained housing, safe neighborhoods, and a strong sense of community. Its anchors were its churches, schools, senior centers, recreation facilities, and other amenities. It provided good public transportation and close proximity to downtown Cleveland. Its restaurants, bakeries, art studios, markets, and other small businesses were a destination for residents from surrounding communities. Its streets bustled with life as children rode bikes, families took walks, and neighbors looked out for one another.

In every sense it was, and still is, a community. Despite its challenges, Slavic Village’s civic leaders, residents, and businesses remain committed to restoring their community’s former quality of life and building a bright future both for current residents and those yet to come. A pilot for community revitalization could not find a more worthy testing ground.

The project bears watching, as its success could be replicated in neighborhoods and communities across the country. The key is simultaneously addressing existing inventories of neglected and low-value properties that drag down property values, providing assistance to existing homeowners in distress, and protecting and restoring habitable properties to attract new home buyers and spur a housing recovery.

Robert Klein is founder and chairman of Safeguard Properties, the largest privately held mortgage field service company in the country Since founding Safeguard in 1990, Klein has been an industry advocate to advance best practices.Until unsalvageable vacant and abandoned properties can be demolished, the rebuilding process can’t begin.

To read the article in its enirety, please click here.

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with nearly 1,000 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.

MBA Servicing Conference

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

On February 21-24, Safeguard attended the MBA Servicing Conference.

MBA Servicing Conference
February 21-24, 2012
Orlando, FL

The Mortgage Bankers Association hosted its annual servicing conference last month, welcoming members from all aspects of the mortgage field services industry to sunny Orlando, FL. Safeguard’s CEO Alan Jaffa was honored to introduce this year’s keynote speaker, Paul Begala, who is best-known as a CNN analyst, as well as a best-selling author and a former member of the Clinton administration. Begala’s address touched on an array of topics, including current events, the 2012 general election, and support for America’s military personnel.

The opening session was then turned over to three industry experts. Carol Galente, assistant secretary of the FHA Commission, spoke on the role of the FHA, the FHA’s current financial health, and plans for the future. Theodore Tozer, president of Ginnie Mae, provided insight into Ginnie Mae’s plans to aid with the housing crisis and the status of its portfolio. He also indicated that HARP 2.0 will be successful since it removed the LTV (loan-to-value) cap and extended the program by two years. He noted that HARP 2.0’s key challenge is in garnering the trust of the borrowers, who may believe that it is too good to be true.

The final speaker of the opening session was Darius Kingsley, chief of homeowners with the US Department of the Treasury. Kingsley also commented on HARP 2.0, as well as improvements to HAMP—which includes greater flexibility in its debt-to-income ratio expectations. He closed by saying he believes the housing market will begin to recover in 2012.

Protecting Neighborhoods
Safeguard’s CEO Alan Jaffa had the opportunity to participate on two panels during this conference. The first, entitled Property Preservation—Protecting Neighborhoods One House at a Time, was moderated by Wells Fargo’s Sherilee Massier. Additional panelists were Matt Martin from HUD’s National Servicing Center, Kevin Osuna with Gateway Mortgage, Vicky Beever from JP Morgan Chase, Kellie Rohling with Everhome Mortgage, and Tracy Hager from Mortgage Contracting Services.

The session focused on pressing issues and challenges faced by servicers regarding the spike in property registration ordinances popping up across the country. HUD also offered statistics regarding their volumes and the panel shared the successes over 2011.

2011 Successes
Jaffa attributed much of 2011 successes to the tremendous amount of dialogue between the servicing industry, investors, and city officials. Some highlights include, MCB’s monthly newsletters and quality control feedback forum, the active MBA working groups with each of the investors, and HUD’s updated policies and FAQs. Alan and the other panelists concur the successes are a result of collaboration and discussing data and trending, not the exception cases.

The next challenge offered to HUD was to establish a joint-training session for the servicers, field service providers, FSMs, and MCB. HUD offered joint training several years ago at the onset of M&M II and agrees the industry is due for updated training. Safeguard is working with HUD staff in Washington, D.C. to coordinate this training in 2012.

Property Registration Requirements
The expanding property registration requirements offer significant challenges to the national servicers due to the local requirements varying so greatly. Servicers shared their best practices of communication and outreach to the city officials and all agree that centralizing state-wide ordinances would be a tremendous efficiency to the servicing shops. The suggested plan of attack is to take the message to the road and educate the city officials on the role and intentions of the servicer to comply with all city code.

Vicky Beever offered Chase’s approach to work with cities to open the lines of communication and reduce city citations and violations. A key strategy of Chase is the established team of field officers in key cities across the country, including Chicago and Detroit. The field officers maintain a physical presence in the cities and work with city officials to ensure the city is aware of their intentions to maintain each property within code. The field officers also provide a level of quality control and routinely inspect their inventory to ensure the properties are safe, secure, and free of debris.

Matt Martin offered a host of statistics on volume processed by MCB for over allowable requests, extensions, title packages and reconveyances. He also encouraged servicers to get involved in the MBA working groups to help HUD change processes to be less burdensome for all.

REO Challenges
Jaffa also participated on the panel for the session entitled Current Challenges in REO Management and Disposition, which was moderated by Caroline Reaves from Mortgage Contracting Services. Additional panel members were Mark Paniccia from SunTrust, Joe Cutrona from CoreLogic, and Matt Sylvia from Bank of America.

Because of the increased ratio of REO sales to completed foreclosures, the industry is seeing a shift toward the short sale alternatives, deeds-in-lieu and auctions, as well as movement from portfolio REOs to agency REOs. In addition, the representatives from SunTrust and Bank of America both said they are taking steps to improve the timeframe within which short sales are being processed.

Retail Alternatives
Matt Sylvia noted Bank of America is building a platform to handle retail alternatives, but it is a complement to traditional flow. They aim for 10% of dispositions to follow this path. Jaffa questioned if the 10% goal of Bank of America would potentially increase with the onset of rental initiatives. Mark Paniccia noted that SunTrust has no rental program at present and emphasized the importance of maintaining assets that are financeable. SunTrust uses auctions where it is hard to identify a target buyer and often utilizes bulk sales for parcels of vacant land. Sylvia also commented that there are more online auctions being conducted today than in the past.

Paniccia indicated SunTrust uses asset class to determine the appropriate disposition strategy. Joe Cutrona added that strategies can also be determined by value band.

Jaffa offered commentary on single family rental, noting that there is no company who manages a large volume of these assets today. To do so will require an incredible network of vendors and managers. Ultimately, servicers’ success in this arena will be determined by tenant satisfaction—even after the property is sold.

Return on Investment
In discussing the repair decision-making process, Paniccia remarked that SunTrust can assess each as the owner since they fully own most REO assets. He takes two perspectives into account:

1) What can we do for the shareholder? There is usually a 30% discount for a cash buyer and this must be compared against the ratio of an as is to as repaired assessment. The difference between the as is and as repaired valued is assessed over the cost of repairs plus the cost of holding minus market decline and claims processing.

2) What can we do for the neighborhood? Servicers want properties to look like the neighbors. They will generally err on the side of repairing since an increased sale price helps the neighbors too.

Jaffa questioned whether a servicer would ever repair to yield the same sales price; Paniccia said it depends if finance ability is a concern. If a low-dollar spend will improve the likelihood of financing, the servicers will repair the vast majority of the time.

Sylvia relayed that Bank of America has a repair strategy but it can be an art, not a science. They focus on cosmetic repairs, rather than full rehabs and rely heavily on recommendations from agents and Asset Managers.

Jaffa and Reaves confirmed that, from the field service perspective, the trend to repair continues to increase with most repairs ranging from $7,000 to $10,000.

Combating Fraud
Cutrona offered perspective that people are inclined to take advantage of weak process flows and a lack of local management. Paniccia described SunTrust’s approach of preventative and detected controls, which include a minimum of 10 days on the market before offers are taken. They receive multiple offers on 25-40% of assets. Sylvia added that Bank of America receives offers on two thirds of properties within 60 days of listing. Detected controls are in place to conduct “flip checks,” subsequent transactions on the asset within six months of sale and patterns of the aforementioned with the same realtor.

Panelists recommended an escalation process to address these types of concerns along with the expanded use of technology to add transparency and accountability to processes.

Opening Communications within Default
Paniccia posed questions to the audience as to how servicers can avoid listing in REO for less than a short sale offer and how they can take the REO valuation method upstream to make better foreclosure decisions. Using the REO broker in deed-in-lieu calculations was offered as one method to improve results.

Jaffa questioned panelists on their use of predictive analytics in determining volume or location of volume 6 to 9 months in advance. Sylvia and Paniccia indicated it would be very helpful but cautioned against the impact of rapidly changing factors. Jaffa noted Safeguard is looking at area concentrations by client to provide detail where possible.

Protecting Tenants at Foreclosure Act: 3 Years Later
Jaffa stated that home ownership rates will never be what they were several years ago. All indicators are that rental programs are coming and those moving into the space will need to choose their partners wisely. Systems exist today to handle rent collection and property management functions. The true driver will be the folks on the ground handling resident interactions and concerns.

Paniccia noted that most former owners are targets to be residents. He questioned what will need to happen to prices to entice them into the arena. Jaffa noted the shift in perspective from buying early in one’s life cycle to renting for a awhile and then buying down the road. Reaves noted that many young couples want a home but don’t have the means to get one; rental is a great opportunity for them.

Upon receiving an audience question about who will manage the rental assets, Jaffa confirmed that Safeguard and, presumably, other field service companies will be involved since these programs will require scalability not present today. Jaffa reiterated that success will depend on company’s ability to address resident concerns quickly and with enough finesse to keep the resident satisfied.

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 800 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.

Creative Destruction

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

On April 2, housingwire.com released an article entitled Creative Destruction.

Creative Destruction

The average cost for demolishing a dilapidated house ranges between $7,500 and $10,000, but neighbors often pay Douglas Fernbacher and his crews with pizza.

The Chicagoan with a Miami tan has spent 14 years tearing down everything from single-family homes to Kmarts. In years past, when a house came down, a larger one took its place soon after. He brought in dirt from nearby developments to fill the foundation hole his crew excavated.

But today there are no nearby developments. Since the housing crash in 2007, there is no clearer physical representation of the busted housing bubble and the remains of its artificially inflated structure than a demolition site.

Fernbacher’s company GSPS is a contractor for several property preservation firms. All they do is tear down homes. They are the last resort for many communities all over the country overrun with blight.

Starting in 2011, however, cities made the first tentative steps toward clearing away the excess. There were more than 18.7 million vacant homes in the U.S. last year, according to the Census Bureau, down from more than 18.9 million in 2010.

But much more will need to be done to address the problem of blight. Vacant properties increased every year over the last decade from the 13.6 million empty homes counted in 2000. Between 2005 and 2008, as the real estate market began to overheat and record-level foreclosures left many properties abandoned, vacancies jumped from 15.8 million to 18.7 million homes.

In 2011, nearly 76% of these properties were considered vacant year-round.

“I think there’s a collective conscious coming here, and I think that people are starting to realize that we have to get serious about this,” Fernbacher says. “We have to move these houses. And the only way to do this is to remove them.”

One of Fernbacher’s clients is Safeguard Properties, the Ohio-based property preservation firm. Its founder Robert Klein is taking Fernbacher around the country this year from conference to conference on a demolition crusade, to convince cities to pursue the clean slate their hardest hit communities crave.

“Every single city, I don’t care where it’s at, has these blighted communities,” Klein said. “They are a cancer.”

Their first opportunity is a quiet place left even more silent after the housing downturn. In Slavic Village, a community located in Cleveland, Ohio, home prices plummeted from nearly $150,000 during the housing boom to roughly $39,000 today, according to data from Altos Research.

The 29 properties sold there in early March spent an average 550 days on the market, Altos said.

Safeguard and GSPS will start a pilot program this year to demolish 2,200 Slavic Village homes that are considered beyond saving. But it isn’t as simple as that.

TEARING DOWN THE STIGMA
Slavic Village was spotlighted in the Alyssa Katz book “Our Lot” as a prime example of subprime predatory lending practices.

Barbara Anderson was one of the first black homebuyers in Slavic Village. According to her Senate testimony in 2007, a broker approached her with a refinancing proposal and approved her for a loan at 8.5% through the now-defunct Conti Mortgage. Within four years, the rate jumped to 14.5%, pushing her monthly payment higher by nearly 60%. Her loan was sold 15 times over that time. Today, the result is apparent. Slavic Village is a ghost town.

Klein with community leaders and the local city council president in February with their solution.

Safeguard placed all Slavic Village properties into three categories. Owner-occupied homes fall into the first category, homes in need of rehabilitation but vacant are the second category, and the third category consists of ones that need to come down.

Most of the properties sit in either of the first two categories, but any progress waits on tearing down the ones in category three.

“No developer will come in when you have five occupied properties, five vacant properties and one that needs to be demolished. Those five properties are affordable, and can be rehabbed fairly cheaply. But nobody will come in until you’ve demolished that one property,” Klein said. “What we’re doing now is we’re putting together a model to make this thing work in Slavic Village. If it works in Slavic Village, we can do this anywhere in the country.”

THE DEMOLITION
You can tell Fernbacher enjoys what he does more than attending the conferences. His joy for tearing down buildings is like that of a kid playing with Tonka trucks in his backyard. And when he talks about the array of hurdles that keep him from doing what he loves, he sounds like that same kid grudgingly doing his homework before going outside.

When a demolition crew first arrives, it checks for environmental problems. A contractor is hired to assess the property for lead-based paint, asbestos, oil tanks and other problems. Fernbacher says the vast majority of the homes built in the mid-1970s have something potentially toxic about them.

“Back then, a company called Armstrong Flooring thought it would be a good idea to use this wonderful invention called asbestos,” Fernbacher says. “But usually you can get these problems taken care of quickly. If banks or servicers or cities want to get it done, it could take 30 days. It just depends. Actually getting the work done doesn’t take that long. Taking out asbestos flooring can take a few days and you’re done.”

But then demolition contractors have to get the permit from the city. Depending on what city a crew is operating in, the process can be relatively easy or a nightmare. In Chicago, it’s a nightmare.

Tearing down a home in the city costs the servicer an automatic $2,300 charge to disconnect the water and sewer services at the street level. Fernbacher says fees easily exceed $5,000 there, and the permit process can take several months. On top of that, servicers have to pay any outstanding bills owed to the city.

“We had a situation where my client had to pay a $5,000 water bill before we could demolish it. The servicer had to pay that. Yeah, it was a shock to them,” Fernbacher says.

He takes a deep breath though and sits forward. “Then comes the fun part,” he says.

Demolition crews that finally secure a permit put up a security fence first, drop off their fuel tanks and the hydraulic excavator. There’s a barbaric sort of grace to how it’s done. The excavator starts at the top and begins peeling the property away. The crew then separates the debris into piles of brick, stone, metal, pipes, the HVAC and wood. A surprising amount of it can be recycled.

In times past, when nice homes were being torn down for McMansions to take their place, contractors would often salvage things like doors, stained glass, even door knobs. Fernbacher says he would make anywhere from $1,500 to $2,000 salvaging through the piles and another couple of thousand reselling metals. These days, though, the pickings are slim.

He’s sure some of the McMansions built over previous demolition sites have been torn down since as well.

Down to the foundation, the excavator digs out the brick, concrete and stone, which is also separated and recycled.
“You’re basically left with a hole in the ground,” Fernbacher says.

About 12 trucks of dirt come rumbling down the street next. It’s packed in and leveled out.

“Then, you’re essentially ready to lay sod and lay seed and bring the community back,” Fernbacher says. “The neighbors thank us. They say, ‘Thank you for taking care of this blight. Now, I don’t have to worry about people coming out of these properties at 2 in the morning and I have two small children.’ It’s such a good feeling knowing that you’re making a difference in these neighborhoods even if it’s one house at a time. We get pizzas delivered a couple of times. That did happen once or twice, because we took down the ugliest most dilapidated house on the block. Most neighbors with a $300,000 house, they don’t want the $30,000 eyesore. It’s hurting their life savings.”

Gus Frangos is the president and general counsel for the Cuyahoga Land Bank in Cleveland. Since ramping up its operations in 2011, it has knocked down close to 800 homes in the county, most of them in the Cleveland area. It has another 700 planned this year.

“When we go and demolish properties, people come out and, literally, they’re crying they’re so happy,” Frangos says and pauses.

It seems so feeble for these neighbors of his. An overwhelming amount of people are current on their mortgage but have also funded underwhelming government programs, millions in executive bonuses, billions in bailouts to Wall Street firms, billions more to Fannie Mae and Freddie Mac, trillions more in no-interest loans from the Federal Reserve to banks considered more systemically important than the people forking over the money.

And when a city or local government manages the $7,500 to tear down a property that had gone ignored and neglected for years, they weep and throw pizza parties. The stigma of demolition’s finality is lifted, and in its place is a clean slate. Rarely is a larger home put in its place.

Frangos says their challenge is to figure out what to put there. Often it’s a park or community playground, even a church parking lot. Anything, but a house.

“You’re stabilizing property values when you do this,” Frangos says. “Who’s going to buy a house next to some of these homes? You could have gold-plated countertops, but if you live next to that, they’re not going to buy in your neighborhood. Period.”

MORE TO COME
The kind of homes landing in the Cuyahoga County Land Bank is shifting. When it first launched in 2009, the primary pipeline of roughly 100 properties coming in were about 40 from Fannie Mae, another 40 from the Department of Housing and Urban Development and the rest were sent from banks and local cities.

As the robo-signing scandal brought the foreclosure process to a standstill in many states, the tax foreclosure system has been rejuvenated, precisely because of the land banks. When a local government forecloses on a property for delinquent taxes, that money becomes a “phantom receivable,” according to Frangos. No one bids on the property. The state and city lose the tax revenue owed. With budgets already tight, rehabbing the property or tearing it down is simply too expensive and so the blight remains untreated.

“That’s why the process was scaled back,” Frangos says. “The government has to be somewhat careful about how much they’re foreclosing.”

With the development of local land banks, the process rebooted, and in Cuyahoga County there is a big influx of city and state-owned properties that have been donated to the land bank. Meanwhile, Fannie Mae incoming properties dropped to 15 per month because of the robo-signing slow down.

Several state attorneys general have tentative plans in place to use some of the $25 billion foreclosure settlement to help fund expensive demolition projects. Ohio AG Mike DeWine set aside $75 million of the roughly $385 million the state plans to receive.

According to Frangos, the money will likely be distributed on a match basis, according to preliminary meetings he attended. The Cuyahoga County Land Bank and the city of Cleveland assembled a $14 million pool to ask for a match.

“Hopefully, we’ll have $30 million to throw at it,” he says.

More federal money is coming too, with some of that specifically for demolition. HUD allocated $6.8 billion through three rounds of Neighborhood Stabilization Program grantees. Local community groups, nonprofits and governments are using the money to acquire and rehab properties.

But the city of Cleveland felt it wasn’t allowed to spend enough of the NSP 3 money specifically for much-needed demolition. According to its third quarter NSP progress report, the city will spend $18 million on rehab projects, but only 10% of NSP 3 funding could be used for demolition.

“For this reason, Cleveland is requesting a waiver of the 10% cap on NSP 3 funds for demolition, up to 41% of the total NSP 3 allocation for a total demolition allocation of $2.8 million,” according to the report.

George Gonzalez, a spokesman for HUD, says the waiver on the cap was granted, and the city was allowed to spend 41% of its NSP 3 funds on demolition.

“Nationally, including Cleveland, HUD has granted 20 waivers for the demolition cap for use of NSP 3,” Gonzalez says.

Chicago, Atlanta and other cities around the country are installing programs to demolish more homes. The largest may be Detroit, where the mayor pledged to tear down 10,000 vacant homes by the end of 2013. The city assigned 4,074 structures to contractors, and 3,629 of these properties are now gone, according to the latest data.

LATEST EFFORT
Sen. Jack Reed, D-R.I., introduced a bill in March that would provide another $15 billion to states, cities and nonprofits for rehab and demolition projects. Roughly $10 billion would be granted using a model based on the NSP, and $5 billion will be distributed through new competitive grants. It would also provide more support to local land banks.

“This initiative will provide a flexible source of funding to help local communities leverage federal dollars to effectively address vacant and blighted properties in their areas,” Reed says.

Slavic Village could be the launching pad for a national program, where rehab investors, demolition crews, servicers, property preservation companies and the city are partnering to rip down properties and attract private capital to then rejuvenate the house next door.

“It’s still in the implementation stage,” Klein says. “This has never been done. We’re figuring out the concept.”

Rick Sharga, executive vice president of Carrington Mortgage Services, believes there will be more land bank projects this year.

“One of the reasons we haven’t seen much of this activity to date probably comes down to budgetary issues — many cities across the country are running deficits and simply don’t have the funds to pay the demolition costs, even if the property owners were willing to give them the properties,” Sharga says. “The fact that certain Ohio counties have decided to use funds from the AG settlement drew some complaints from consumer groups, but is really a smart way to pay for clearing away properties that are safety hazards, and which are likely dragging down the property values of adjacent homes.”

The key to more enthusiasm for a broader effort is the early success of these pilots, which Sharga said is inevitable.

“There may be a psychological barrier to the demolition strategy as well; bulldozing a home is a permanent action, and indicates that everything else has failed,” Sharga says. “I think once we see positive results in some of the communities that take this action first, you’ll start to see it happen in other areas which were either egregiously overbuilt during the housing boom, or fell into disrepair during the recession.”

Caroline Reaves, CEO of property preservation firm Mortgage Contracting Services, says some servicers are beginning to change their own policies to encourage more demolition. Cities like Chicago are beginning to enforce code violations and force the banks to pay for the demolition.

There were 18,320 vacant Chicago properties as of September 2010, according to the most recent study from the Woodstock Institute. Nearly 70% were tied to foreclosure filings began between 2006 and the first half of 2010.

“Neighborhood blight has been one factor contributing to drastically depreciated home values,” Reaves says. “To prevent its spread, some banks and servicers themselves are re-evaluating certain vacant properties and proactively demolishing abandoned, condemned and/or dilapidated properties to result in nice, manicured lots.”

In early March, Bank of America donated another 75 homes to Kansas City and provided up to $875,000 to rehab or demolish them. Last year, it donated another 100 to the city of Detroit.

Still, with costs so high and timelines so long for taking down a home, forecasting how much of the excess inventory will be torn down is nearly impossible.

“It is challenging to forecast an exact volume of demolition initiatives that will be carried out this year, but we are seeing a high level of collaboration between all the parties involved in this process to ensure a positive solution that helps stabilize our nation’s communities and reduces neighborhood blight,” Reaves says.

Fernbacher, too, believes cost is the largest issue that is keeping more projects on hold. But, he says dollar-for-dollar, demolition could be one of the best solutions for the housing market once carrying costs, insurance, safety and liability costs for homes stalled in a jammed foreclosure process are factored in.

He’s already seeing a growing interest. Based on his models, GSPS business is set to quadruple from last year — in just the first four months of 2012. He has 21 full-time employees and 230 independent subcontractors, many laid-off construction workers who once built nearby homes.

But unlike demolition causes in the past, there will be a lot more green space this time around, he says.

“It’s completely come full circle,” he says. “Where it became about excess before, it’s about becoming a minimalist and reducing the inventory now.”

To view the online article, please click here.

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 800 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.

Citi and Foundation for Small Business Development Launch Training Program

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

On March 21, Safeguard partnered with Citi and the Foundation for Small Business Development for the launch of the National Certification and Training Program.

Citi and Foundation for Small Business Development Launch National Certification and Training Program

Innovative partnership with Safeguard Properties will train and certify more than 400 small, minority- and women-owned businesses and will create local jobs

New York, NY (March 21, 2012) – Today, Citi and the Foundation for Small Business Development joined Karen G. Mills, Administrator of the U.S. Small Business Association, to announce the launch of the Partnership for Small Business Development, an innovative new national training and certification program that will empower more than 400 minority- and women-owned business enterprises (MWBEs) to grow and create jobs. The enrollees will be subcontractors of Safeguard Properties, a field service vendor of Citi and partner in the project. The program will provide certification that will enable the businesses to qualify for set-aside contracts of large vendors like federal, state, and local governments and large companies. The program also will provide training to enable the businesses to compete successfully for those additional contracting opportunities.

Small businesses, particularly MWBEs, are very effective at driving economic growth and generating jobs. For instance, between 2002 and 2007, minority business growth outpaced that of non-minority firms in terms of total revenue, employment, and number of firms. 1 Furthermore, MBEs are especially effective at generating high quality jobs in low- and moderate-income (LMI) communities for LMI residents.

“The Partnership will provide small businesses with additional tools and know-how to compete for more contracts from government and the private sector,” said Bob Annibale, Citi’s Global Director for Community Development. “The result will be increased revenues and the creation of new jobs in the communities that need them the most.”

Charles Rowe, Chairman of the Foundation for Small Business Development, which is coordinating the initiative, said, “This is the first time the nation’s largest small business support network has joined forces with the country’s two main third party certifiers of MWBEs to provide comprehensive assistance to entrepreneurs looking to grow their companies. Together, I know we will make a big difference. I want to thank Citi for supporting this powerful new partnership.”

The Women’s Business Enterprise National Council and other local and national certifying organizations, which offer nationally-recognized certification and business directories that match vendors to vetted MWBEs, will participate to ensure that all the participating businesses receive one-year nationally recognized certification by the end of 2012.

“Organizations like ours have well-established programs to improve MWBEs’ access to contracts with vendors committed to diversifying their supply chains, and we are seeing enormous growth,” said Pamela Prince-Eason, President and CEO of the Women’s Business Enterprise National Council. “In 2010, our corporate members spent $88 billion with our certified WBEs, almost double what was spent in 2007”.

“We are honored to help our contractors expand their economic opportunities through this remarkable program,” said Alan Jaffa, CEO, Safeguard Properties. “In addition to being potential employers, our contractors actively contribute to neighborhood stabilization through their property maintenance efforts in communities across the country, including Neighborhood Stabilization Program communities.”

The Small Business Development Center network — the largest network of its kind in the country — will provide each participating business with training and counseling in order to build its capacity and resources to seize the new contract channels opened by being certified. A 16-hour “grow your business” training curriculum will be delivered in a two-day “training summit” in each of Chicago, Cleveland, Dallas, Ft. Lauderdale, Las Vegas and New York City. On completion of the training, the participating small businesses will be more aware of financing opportunities and the optimal business management practices that will help with securing financing and contracts in the future.

About the Foundation for Small Business Development
The Foundation for Small Business Development (FSBD) is a 501(c)(3) organization established in 1995 and dedicated to the creation of educational material and the support, conduct and promotion of educational activities regarding small business. FSBD exists to support and publish independent non-partisan research and analysis through advances in studies focused on entrepreneurs and small business ownership while supporting the activities and goals of economic development organizations, in particular small business development centers.

About Citi Community Development
Citi Community Development is leading Citi’s commitment to achieve economic empowerment and growth for underserved individuals, families and communities by expanding access to financial products and services, and building sustainable business solutions and innovative partnerships. Our focus areas include: commercial and philanthropic funding; innovative financial products and services; and collaborations with institutions that expand access to financial products and services for low-income and underserved communities. For more information, visit www.citicommunitydevelopment.com.

About the Citi Foundation
The Citi Foundation is committed to the economic empowerment and financial inclusion of low- to moderate-income individuals and families in the communities where we work so that they can improve their standard of living. Globally, the Citi Foundation targets its strategic giving to priority focus areas: Microfinance, Enterprise Development, College Success, and Financial Capability and Asset Building. In the United States, the Citi Foundation also supports Neighborhood Revitalization programs. The Citi Foundation works with its partners in Microfinance, Enterprise Development, and Neighborhood Revitalization to support environmental programs and innovations. Additional information can be found at www.citifoundation.com.

About Safeguard
Safeguard Properties is the largest privately held mortgage field service 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 service companies, lenders, investors and other financial institutions. Safeguard employs more than 950 people, in addition to a network of thousands of contractors nationally. Website: www.safeguardproperties.com.

About Women’s Business Enterprise National Council (WBENC)
The Women’s Business Enterprise National Council (WBENC), founded in 1997, is the largest third-party certifier of businesses owned, controlled, and operated by women in the United States. WBENC, a national 501(c)(3) non-profit, partners with 14 Regional Partner Organizations to provide its world class standard of certification to women-owned businesses throughout the country. WBENC is also the nation’s leading advocate of women-owned businesses as suppliers to America’s corporations. For more information, visit www.wbenc.org.

To view the official press release, please click here.

A New Servicing Battlefront How to Avoid SCRA Errors

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

Safeguard’s Alan Jaffa contributed an article to Servicing Management’s March 2012 edition entitled A New Servicing Battlefront: How to Avoid SCRA Errors.

A New Servicing Battlefront: How to Avoid SCRA Errors

Last December, thousands of military families received the best holiday gifts they could ever have: the news that their loved ones serving in Iraq were returning home. Unfortunately, many family members of those serving in Iraq, Afghanistan and other parts of the world also face severe financial hardships while they make a great sacrifice for their country.

For this reason, the Servicemembers Civil Relief Act of 2003 (SCRA) suspends certain obligations for servicemembers in order to free them from financial concerns and allow them to focus on their military duties. Among other provisions, SCRA offers protections for active duty military personnel and their dependents against the loss of their homes, either through foreclosure or eviction.

However, many military families are not aware of their rights under SCRA. As a result, when active-duty military families default on their loans, they may not know to inform their mortgage company about their status. If they live in properties they do not own that go into default, they may not know to inform their landlords. As well, landlords of defaulted properties either may not be aware of their tenants’ military status or of the protections afforded under SCRA.

SCRA requires that a mortgage company attempt to identify properties occupied by active-duty military families, and prevents the company from certain actions to remove family members from their homes while servicemembers are on active duty. Servicers are required to maintain documentation of their attempts. Most make great efforts to identify servicemembers through a variety of online databases, public records searches, and even inquiries directly to each branch of the military, although the military inquiries may take many months to process.

Complicating search attempts are the “gray areas” in which a military family may occupy a defaulted property that is not in title to the active duty servicemember. It may be titled to a spouse or other family member. The active-duty servicemember may be a tenant in a defaulted property.

There have even been instances in which a military family lives in a mobile home and either the land or the mobile home is in title to someone other than the military member. Even under these types of scenarios, it is important for mortgage companies to attempt to identify properties where active military personnel may live.

The challenge for mortgage companies is finding effective ways to identify defaulted properties that are occupied by military families so that proper steps can be taken to help them remain in their homes and halt any foreclosure proceedings, as well as provide assistance with loan modifications, financial counseling referrals or other services.

To help with this effort, mortgage servicers have begun to engage their field service partners to conduct borrower outreach after properties go into default. During their default inspections, field service inspectors will leave door hangers encouraging borrowers to contact their mortgage company to discuss alternatives to help keep the borrowers in their home. In a similar way, field service companies can help mortgage companies reach out to help identify and verify the military status of defaulted borrowers or occupants of defaulted properties.

Dealing with delinquencies
Routinely, when loans are delinquent more than 45 days, mortgage companies will provide a list of those properties to their field service company to begin monthly inspections to verify occupancy. If the property is found to be vacant – which, on average, is about 15% to 20% of all defaulted properties – that information is reported to the mortgage company.

Inspectors determine whether a property is vacant in many ways, including its general appearance and apparent lack of maintenance, whether utilities have been turned off, or whether neighbors have seen activity at the house. Under normal circumstances, if a property is determined to be vacant, field service companies will send a contractor to secure the property and proceed with monthly inspections and routine property preservation services on behalf of the mortgage company.

This is done not only to protect the integrity and value of properties when homeowners abandon them, but also to ensure that abandoned properties do not become a nuisance to the neighborhood and impact surrounding property values.

In instances where a defaulted home is owned by a military member on active duty, what appears to be an abandoned property may not be so. It may be that the spouse has left for an extended period to stay with other family members, or that the servicemember simply has left the property unattended while on deployment. For this reason, mortgage companies must take extra precautions.

To check on military status, it is vital to include an extra step in the inspections and property preservation process. Before any actions are taken to secure any properties found to be vacant, the mortgage company should check the entire list of properties identified as vacant and
search various database sources to attempt to identify any that may be owned by active-duty military.

If it is determined that an active-duty military member owns the property, then the residence will not be secured. Instead, the servicer will attempt to make contact with the owner to offer loan modification assistance, counseling referrals or other help. Prior to securing any property found to be vacant, an inspector will leave a notification called a “vacancy letter” or “eight-day letter.” This letter informs the occupant that the property is believed to be vacant and that it will be secured in eight days if no contact is made with the servicer. A paragraph may be added to the letter alerting occupants that active-duty military personnel have certain rights under SCRA and asking them to notify the servicer immediately if an occupant has active-duty military status.

Foreclosed properties
Under SCRA, active-duty military personnel and their families may be protected from eviction from a foreclosed property, whether or not the property is owned by the servicemember. To identify properties where this may be the case, a field service contractor or inspector will leave three documents discreetly at the door of the property.

These documents explain that the property has either been foreclosed upon or a deed has been accepted in lieu of foreclosure. They describe the assistance that may be available to help the occupant remain in the property or relocate by choice, and clarify that these documents are not a notice to vacate the property. The documents also include forms to identify occupants who may have active-duty military status and notifies them of their rights under SCRA to protect against eviction.

On behalf of the mortgage company, contractors or inspectors should make at least five attempts over a 10-day period in order to make personal contact with an occupant to assist in filling out the forms. If attempts to reach an occupant fail, contractors and inspectors may also make inquiries of neighbors to learn if an active-duty military member is occupying the property. All communication attempts are carefully detailed in written reports, supported with photo documentation and submitted to the mortgage company prior to conveying the property or taking any further action with occupants.

While mortgage companies need documentation to demonstrate their good-faith efforts to comply with SCRA, many go beyond the requirements of the law to identify active-duty military personnel and ensure that the servicemembers receive the protections to which they are entitled.

To view the online article, please click here.

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 800 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.

A Better Alternative to Vacant Property Ordinances

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

Robert Klein contributes an article entitled A Better Alternative to Vacant Property Ordinances to the February 2012 issue of HousingWire magazine.

A better alternative to vacant property ordinances

States should accelerate foreclosures on abandoned property to address blight

KEY CONCEPTS

Chicago and Las Vegas passed ordinances to require lien holders to maintain and secure vacants.

Only ownership and possession gives lien holders the legal authority to completely accept that responsibility.

Vacant property registration ordinances aren’t new. Many cities have had property ordinances in some form on the books for years. But they were rarely enforced until the housing crisis took hold a few years ago.

With the collapse of the housing market came a slew of vacant and abandoned properties. Out of frustration, when cities couldn’t find a party to hold responsible for the deteriorating condition of properties, vacant property ordinances came into vogue. Thus, when homeowners abandon their properties, cities attempt to make the lien holder accountable for the upkeep of the property.

On the face of it, vacant property registration ordinances make sense. Initially, their purpose was to help cities collect current and accurate contact information about the lien holder of record when public information is lacking, which allowed cities to issue prompt notification when a code issue occurs.

But as cities have continued to struggle with the growing burden of foreclosed properties, their approach to vacant property ordinances has become much stronger. Chicago and Las Vegas are two prime examples, both of which passed aggressive ordinances in 2011.

As originally proposed, the Chicago ordinance attempted to define the lien holder as the homeowner prior to the foreclosure sale. To the city’s great credit, it listened to the concerns of mortgage servicers and investors, and ultimately passed a version last summer removing the homeowner definition, but still requiring that servicers maintain and secure properties prior to the foreclosure sale.

The Las Vegas ordinance passed in December is similar to the one Chicago ultimately passed. Both require lien holders take responsibility for maintaining vacant properties prior to foreclosure and impose stiff fines and penalties for failure to do so.

It is understandable that in the absence of a homeowner, cities would like lien holders to step in and assume the homeowner’s role to care for properties. The problem is, prior to foreclosure, the lien holder’s rights to protect a vacant property are limited, even when the homeowner abandons the property.

Legally, a lien holder can only take steps to avoid code violations and protect the collateral value of the property. In other words, they can mow the lawn, remove yard debris and potentially hazardous materials inside and outside the home, winterize plumbing, remediate roof leaks and secure windows and doors. They must, however, leave the house accessible to the homeowner prior to foreclosure — even if the homeowner has abandoned the property and is no longer maintaining it.

Meanwhile, as properties await foreclosure, even with the billions of dollars the industry spends each year to inspect, maintain
and secure vacant properties, they will deteriorate. A large percentage are vandalized, with the properties stripped of copper pipe, aluminum siding and other materials that can be sold for scrap. Prior to foreclosure, the lien holder has limited standing to make repairs. In many cases, by the time a property moves through foreclosure, its value is virtually gone.

In Illinois, for example, the foreclosure process can take a year or longer. In Nevada, it is six months or more. In some states, foreclosures can take up to two years.

Safeguard Properties currently tracks the existence of nearly 700 ordinances, each with its unique requirements, fees, fines and penalties. In all, the goal of the ordinances is the same — to find a way to protect vacant properties and the neighborhoods that surround them. However, by enacting vacant property ordinances as the only way to accomplish that, cities in states with lengthy foreclosure timelines are shining their flashlights in only one corner of a dark room.

If municipalities really want lien holders to take full responsibility for vacant and abandoned properties, they need to compel their state legislatures to adopt laws that would accelerate foreclosure proceedings for vacant properties that have been abandoned by homeowners.

Only ownership and possession gives lien holders the legal authority to completely accept that responsibility.

With the ability to take possession of vacant properties while they are still in reasonably good condition, lien holders can do what is necessary to make them viable family homes once again.

Cities will have fewer code and nuisance issues to concern themselves with. Vacant properties will be less vulnerable to damage. And the value of surrounding properties and the integrity of neighborhoods will be protected.

Isn’t this really what all of us want?

To view the online article, please click here.

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 800 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.

Safeguard Presents to Texas Code Enforcement

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

On February 15, Safeguard’s community initiatives department presented at the 27th annual Business and Educational Conference Hosted by CEAT.

Safeguard Presents to Texas Code Enforcement Officers

Safeguard’s community initiatives department joined nearly 200 code enforcement professionals last week in Tyler, TX for the 27th annual Business and Educational Conference, hosted by the Code Enforcement Association of Texas (CEAT). Safeguard presented information on a wide range of topics including initiatives to reduce neighborhood blight, code enforcement solutions and vacant property registration. Safeguard is a proud supporter of CEAT.

CEAT’s conference agenda and curriculum included strategies for addressing the many current issues facing cities within today’s constrained fiscal environment. The community initiatives department’s outreach efforts were supported and reinforced as many CEAT members reported that vacancies are an escalating problem within their communities. Many contacts were created during the 2 days of networking opportunities, and direct outreach was made to countless jurisdictions throughout Texas.

Brandon Kirkham, president of Compliance Connections, which is a platform developed by Safeguard, spoke directly with municipal representatives to share the message that its national network of clients and the mortgage servicing industry is working with cities to preserve abandoned properties and the quality of life within neighborhoods. Code enforcement officers were pleased to learn of the active roles that the industry is taking within their communities and of the availability of Compliance Connections, a no-cost solution to identifying and communicating directly with the servicers responsible for vacant properties.

The community initiatives department recognizes the importance of reaching out to our Texas partners and is grateful for the opportunity to participate at the annual conference. Congratulations are extended to CEAT for their efforts in hosting a successful venue for both their constituents and corporate supporters.

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 800 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.

Safeguard Featured in Mortgage Banking Magazine

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

Safeguard Properties contributed a feature article in the February 2012 Mortgage Banking Magazine entitled Vendor-Management Best Practices.

U.S. Census Bureau date released in October 2011 show that between 2000 and 2010, vacant propertied nationally increased 43.8 percent. The number climbed from 10.5 million to 15 million. Many industry experts believe those numbers won’t change much in the foreseeable future. Craig Nickerson, president of the National Community Stabilization Trust, Washington, D.C., speaking at the Five Star MPact Conference in Dallas in December, estimated that 850,000 foreclosures occurred in 2011. He predicted that 1.5 million foreclosures will occur in 2013, and foresees a return to 2011 levels by 2015. As foreclosure rates continue to rise, recruiting and retaining the highest-quality vendors and contractors to protect high volumes of vacant and abandoned properties must be one of the highest priorities for field service companies. Field service companies hire vendors to inspect, maintain and repair properties on behalf of mortgage servicers and investors. Vendors perform such services as securing properties, maintaining landscaping, winterizing plumbing, removing debris, remediating roof damage, cleaning, painting and providing various levels of repairs. As the field service industry advances, so must vendor-management best practices to ensure vendors have the training, tools and resources to perform their jobs effectively. Like other national companies, Safeguard Properties maintains a large network of vendors across the country- close to 10,000. On a monthly basis, the company utilizes these vendors to inspect and maintain more than 1 million properties. Effectively managing a large vendor network to service historically high property volumes requires a significant commitment to train and recruit qualified vendors, ensure quality, promote diversity and invest in technology to support field operations.

To view the article in its entirety, please click here.

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 900 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.

What Will it Take to Stabilize Communities

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

On January 4, Mortgage Servicing News released Robert Kleins blog entitled What Will it Take to Stabilize Communities.

When we turn the calendar to 2012, the U.S presidential race will heat up. America’s housing crisis is certain to be a hot campaign issue, and we will have no shortage of suggestions to stabilize communities—from expanded programs to purchase and redevelop vacant and foreclosed properties, to assistance to either buy a home or prevent foreclosure.

It seems counter-intuitive, but demolishing non-viable properties is critical to the solution. It’s expensive. In Cleveland, Ohio alone, the cost to demolish unsalvageable properties is estimated to be $150 million. In Detroit, Chicago and other urban cities, it is probably higher.

But until the properties are demolished, neighborhoods hardest hit by the crisis won’t recover. Property values will continue to decline. Prospective buyers won’t invest until troubled properties, and the nuisances they bring, are gone.
An innovative pilot is currently in development in Cuyahoga County, which includes Cleveland. Business and community leaders are working on a model to focus on entire neighborhoods, to demolish hopeless properties and repair salvageable ones to create affordable housing and protect property values.

The big question is whether this idea can work, and if so, can it be expanded across the country to help with the nation’s current housing crisis?

To view the online blog, please click here.

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 800 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.

Customer Service = Resolution

Posted on September 13, 2018April 5, 2020 by Safeguard

Safeguard in the News
January 3, 2012

Alan Jaffa has always stayed true to his company’s philosophy that customer service equals resolution. In the 16 years that he has been with Safeguard Properties and the more than 18 months he has been CEO, a continued focus on customer service has driven the company to success.

Safeguard Properties is the largest privately held mortgage field services company in the country. It inspects and maintains defaulted and foreclosed properties for a wide range of clients in the mortgage industry.

“We are the property preservation company that will maintain grass, board windows and maintain the property once the banks have taken possession and are actively trying to sell the property,” Jaffa says. “We do this nationwide. There isn’t a ZIP code we haven’t been to in the United States.”

Safeguard’s national reach and it’s commitment to quality service have allowed the company to experience growth since the company’s founding 21 years ago.

“We have been able to grow, because we market our services just by doing what we do day-in and day-out for our clients,” Jaffa says. “Our growth has always been year-over-year for 21 years and counting by continuing to pick up market share and continuing to build relationships with existing clients.”

Big contributors to Safeguard’s growth are those business relationships and the company’s ability to listen to its customers.

“Over the years, we have grown and grown by listening to our clients, hearing their needs, understanding their pain points and building on that with additional services,” Jaffa says. “Within the last year, we started providing utility services where we are handling a service that our clients always used to handle. We’ve been able to come up with processes and automate it and take that burden from our clients, which has helped us increase our visibility.”

Safeguard and Jaffa have no plans to alter the business strategy anytime soon.

“My main goal is to continue to stay true to who we are and what we’re doing out there with our clients and not lose what we built this company on,” Jaffa says. “I’m not saying it gets more difficult as we get bigger to do that, but it does get more difficult to stay focused on that with so many things going on.”

To view the online article, please click here.

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 800 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.