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Robert Klein Talks Law and Order

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

In the July edition of HousingWire, Robert Klein, founder and chairman of Safeguard Properties authored an article titled Law and Order.

Law and order
Ohio city attracts plaudits for tackling foreclosure blight, but major challenge remains

In many ways, Youngstown, Ohio, serves as a comeback model for similar cities around the country that have lost jobs and population since the industrial decline that began in the late 1970s.

Thanks to forward-thinking leaders who have cultivated a supportive business environment, Youngstown has become one of the most improved economies in the country, according to an analysis by the Brookings Institution. A growing energy market has sparked a manufacturing resurgence. A vibrant technology scene is attracting startup companies, warranting mention by President Barack Obama in his State of the Union address earlier this year. And Youngstown’s downtown is springing back to life as an entertainment destination.

Unfortunately, like other cities across the country, Youngstown has also suffered in the aftermath of the housing crisis, with vacant and abandoned properties straining city resources, hurting neighborhoods and driving out residents. It’s understandable that city leaders would want to take action to preserve neighborhoods, protect the safety of its citizens and help maintain the momentum of economic recovery.

However, their decision to enact what is being viewed as one of the most onerous vacant property ordinances as a solution to the problem may actually do more harm than good. The ordinance has a number of possible ramifications, with three apparent major drawbacks in particular some deem worthy of rumination.

Good Guys Pay, Bad Guys Don’t
The first concerns the fact the ordinance requires the owner of a vacant property to post a cash bond of not less than $10,000 to assure the continued maintenance of the property until it either moves through the foreclosure process and is sold to a new owner, or is demolished. The definition of an owner has been broadened to include the person in title, the entity that holds the mortgage and even authorized agents and vendors of the mortgage company who have direct or indirect control of a property.

Here is the sad irony: Irresponsible owners who let their properties deteriorate in the first place aren’t likely to comply with the ordinance. Code enforcement officers and other officials will waste precious time chasing ghosts, with nothing to show for it.

On the other hand, the vast majority of mortgage companies and their agents who already secure and maintain properties abandoned by homeowners could be penalized by the ordinance and forced to pay, even though their properties aren’t causing problems.

Lienholder Conflict
Second, until mortgage companies take legal title to a property, their rights are limited — even when homeowners abandon properties. Prior to an actual foreclosure sale, banks can only perform services to prevent code violations and protect the collateral value of the property in the absence of an occupant. In other words, the requirements of the Youngstown ordinance will most likely conflict with laws limiting a bank’s rights prior to foreclosure.

The expanded definition of a homeowner in the Youngstown ordinance actually sets up the city for potentially expensive and protracted legal actions. In fact, two years ago, the city of Chicago considered similar language in their ordinance, defining lienholders as homeowners prior to foreclosure. Ultimately, they removed the language after listening to the concerns of the mortgage industry in this regard.

It Doesn’t Fix the Problem
Third and finally, the worst enemy of a vacant property is time, and the Youngstown ordinance seems to do nothing to address this. If the city of Youngstown really wants to protect the condition of vacant properties and make banks responsible, the answer might be to help them take possession more quickly. That requires a change in state law to accelerate vacant properties through foreclosure.

In Ohio, the foreclosure process can take two years or longer, whether the property is occupied or abandoned. Even with the billions of dollars the mortgage industry spends annually across the country to inspect and maintain vacant properties, these homes will deteriorate as they await foreclosure. Many will be vandalized, losing value, becoming neighborhood nuisances and negatively impacting surrounding properties.

When a property is deemed vacant and abandoned, accelerating foreclosure would allow banks to obtain title while the property is still in good condition so that it can be sold and reoccupied more quickly.

For some, accelerated foreclosure is a far better alternative to vacant property ordinances. It can reduce the burden on city code enforcement officials and first responders to address nuisance issues. It can protect the condition and value of vacant properties, especially those in fragile neighborhoods. And, perhaps most importantly, it can help maintain viable housing for families, especially first-time home buyers and lower income people.

Youngstown’s leaders have demonstrated a progressive attitude toward rejuvenating their city. There is a strong argument that says they should continue to lead the way to protect homes and neighborhoods across Ohio by promoting legislation designed to accelerate the foreclosure process for vacant and abandoned properties.

Key Concepts

Mortgage companies and their agents who already secure and maintain abandoned properties could be penalized by a new Youngstown, Ohio, ordinance and forced to pay.
The requirements of the Youngstown ordinance will most likely conflict with laws limiting a bank’s rights prior to foreclosure.
If the city really wants to protect the condition of vacant properties and make banks responsible, the answer might be to help them take possession more quickly.

To view the article PDF, please click here.

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.

Robert Klein Shares Views on Youngstown Foreclosure-Bond Law

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

On July 21, Vindy.com published an article titled Youngstown has Collected $480K, Awaits More with New Foreclosure-Bond Law. In it, Robert Klein, founder and chairman of Safeguard Properties shares his own views on the topic.

Youngstown has collected $480K, awaits more with new foreclosure-bond law

YOUNGSTOWN
A city law, created about four months ago, requiring those filing foreclosures on vacant houses to post a $10,000 cash bond is proving to be an effective way to make sure owners, mostly banks, are more accountable, the city’s neighborhood improvement coordinator says.

The city has collected the bonds from 48 property owners for a total of $480,000, and is working to acquire the $10,000 bonds from 18 other property owners, said Maureen O’Neil, neighborhood improvement coordinator.

If a bank maintains the property, it would receive all but $200 of the $10,000 back once the house is sold. The $200 covers administration fees.

If the house falls into disrepair, the city can use the money for required maintenance or demolition.

Youngstown is only the third city in the country — Springfield, Mass., and Canton are the others — with a foreclosure-bond law, and Canton doesn’t enforce its ordinance, O’Neil said.

Since 2004, about 5,200 houses Youngstown went into foreclosure.

The focus in Youngstown is on properties foreclosed since the beginning of the year, O’Neil said, because they are typically in better condition than older foreclosed structures that already have been stripped of vinyl siding, copper piping and almost everything else.

O’Neil’s office is focused on the 159 houses in foreclosure in the city since January.

It will take time to pursue all of them, and there are additional foreclosures in the city that will make that list grow, O’Neil said.

“It’s a new program and we’re still developing it and seeing what works,” she said. “It’s another tool for code enforcement along with rental property registration, vacant property registration, the property maintenance appeals board and prosecutor hearings. Our focus is compliance and to bring properties up to code.”

However, not everyone supports the foreclosure bonds.

Robert Klein, founder of Safeguard Properties, a Valley View, Ohio, business that is the nation’s largest mortgage field service company, called Youngstown’s law “overblown” and “punitive.”

Safeguard manages about half of the properties on the city’s list of those that have paid the $10,000 cash bonds. The company’s clients include major banks such as JPMorgan Chase & Co., PNC Bank and Bank of America.

Those banks “obviously don’t like it,” Klein said. “One of the issues we’re having is the communities are not talking to the industry. They’re talking at the industry.”

The bond “only puts another wall between the industry and cities,” he said.

Having a $10,000 bond won’t help the situation because irresponsible property owners, he said, aren’t likely to comply while those who secure and maintain properties are forced to pay even though their homes aren’t causing problems.

Klein also suggests the city work toward helping to change state law that would allow banks to take possession of houses through foreclosure faster. That way, banks can obtain title while the property is in good condition and then sell it quicker, he said.

Among the 48 properties in which the owner has paid a $10,000 bond is 555 St. Louis Ave. on the South Side.

The grass is thick in the front of the property, and small trees are growing in the house’s gutters. While this house isn’t in good shape, it’s far from the worst on the street.

Ruth Alli, whose house — which has security cameras on the front porch — is only a vacant lot away from 555 St. Louis, said the house has been vacant for two or three years.

A company came one time to cut the grass, but did only a portion of it, left and have never come back, she said.

“It’s a good neighborhood,” Alli said. “I like it here, but that house [at 555] needs attention, and some of the other houses need to come down.”

In Cornersburg, 3240 and 3432 N. Wendover Circle are both on the $10,000 bond foreclosure list.

Augie and Barbara Angel have lived across the street from 3432 North Wendover since 1979.

Though the house at 3432 is in good shape, the grass is overgrown.

“You still have a responsibility to take care of the home,” Augie said. “There’s a lack of consideration for your neighbors by letting it look bad. We love this neighborhood and we want to stay. We’re trying to maintain our property and to have others not care is terrible

To view the online article, please click here.

Robert Klein Sets Record Straight on Housing Demolition and Community Stabilization

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

On July 15, The Plain Dealer published a blog written by Robert Klein, founder and chairman of Safeguard Properties, titled Setting the Record Straight on Housing Demolition and How it can Stabilize a Community: Letter to the Editor.

Setting the record straight on housing demolition and how it can stabilize a community: letter to the editor

Recovering from the national housing crisis has been and continues to be a long, multistage process. The housing market will play a critical role in the broader economic recovery of our nation.

After implementing new banking regulations and budget cutbacks, lawmakers have turned their attention to repairing the fabric of America: our cities, neighborhoods and small towns. States around the country are making strides toward legislation for fast-tracking foreclosures, and some governments have even instituted statewide vacant property registration guidelines.

On the surface, this subject may seem a lot simpler than other issues Americans have dealt with in the wake of the housing crisis, and while rebuilding America’s communities may not be as complex as crafting the Dodd-Frank bill, it is much more than bricks, mortar and 2×4’s. There is a lack of understanding of the most effective way to implement the revitalization process. I believe it requires a holistic approach with several simultaneous steps, and demolition is a critical starting point.

While many may consider demolition as a last resort, it is in fact a vital step in a comprehensive approach when rehabbing a community. It is impossible to cultivate development and garner interest from prospective home owners, as well as investors, if homes that cannot be saved are still standing. When these properties remain, they become a health and safety hazard for residents and neighboring homes. If the proper steps are not taken to remove a nuisance property, then rehabbing efforts are futile.

There are also several benefits associated with demolition, including stabilizing property values and eliminating older homes that contain dangerous substances such asbestos. Also, many of the materials from demolished properties can be recycled. Cities are now repurposing the lots from demolished homes into green space, parks and playgrounds to cultivate community development. More important, demolition paves the way for salvageable homes to be rehabilitated, allowing for the subsequent steps in the development process. In the aftermath of demolition, we can create these community pulse points, build new houses and neighboring homeowners can preserve their property values and see their neighborhood or small town come back to life.

Unfortunately, there are often challenges in getting the demolition process underway, as the permit process can be both costly and time consuming. This proves that greater education is necessary on the need for demolition and its associated benefits. Dollars from both the Neighborhood Stabilization Program and the Hardest Hit Fund have been dedicated to demolition efforts. Despite this designation, in many states across the country there has been a struggle for communities to get their hands on these funds because of the stigma associated with demolition. If the proper funds are not distributed for demolition efforts, then dollars spent to keep people in their homes and to rehabilitate communities are completely undermined.

We need to educate people on what demolition really is. Demolition is not tearing down your grandmother’s home or the house you grew up in. Houses that need to be demolished are no longer homes at all. They are properties that endanger your community, perpetuate blight and prevent revitalization efforts.

Robert Klein, Cleveland

Klein is the founder and chairman of Safeguard Properties.

To view the online blog, please click here.

Alan Jaffa’s Successes with Company’s Growth

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

How Alan Jaffa took Safeguard Properties from a Start-up to an Industry Leader

Alan Jaffa has been CEO at Safeguard Properties Management, LLC, since 2010. Safeguard Properties is the largest privately held mortgage field services company in the country.

Jaffa learned the business by moving through the ranks of Safeguard, experiencing first-hand virtually every department in the company. He joined the company in 1995 when it was a small start-up with few employees. As a result of a great work ethic and innovation, Jaffa moved up quickly, becoming COO in 2002.

By the time he became CEO in 2010, Safeguard had grown its employee base significantly. Under his leadership, Safeguard completed the acquisition of Bank of America’s field service department. Jaffa took this bold step to protect the company’s leadership position and expand its footprint into the south and west regions of the country where large concentrations of the company’s clients are located.

Under Jaffa’s watch the company has almost doubled its revenue, and he has helped fully integrate the acquired entity with Safeguard within six months after the acquisition.

Aside from a focus on growth, Jaffa ensures that he is a visible leader at Safeguard. He spends at least one day per week at each Safeguard location, maintains an open door policy and hosts monthly “Java with Jaffa” sessions around the company to hear ideas from employees at all levels.

Jaffa also meets weekly with his executive team, monthly with the entire senior management team of directors, and hosts quarterly two-day off-site meetings with the executive and management teams to encourage collaboration, address challenges together, build on best practices and identify new initiatives to maintain a competitive advantage.

These efforts help Safeguard deliver greater efficiencies, track and improve quality, recruit and retain diverse and qualified employees and vendors, forecast trends, and anticipate client needs for new and varied services.

To read this article on sbonline.com, click here.

Robert Klein Among Expert Panelists for Code Compliance at REX

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

On June 3, HousingWire.com published an article titled Saving Property Values in the Wake of Foreclosure. In it, Robert Klein, Safeguard’s founder and chairman is listed as a panelist at the recent Real Estate Expo.

Saving property values in the wake of foreclosure

Asset management firms are in a constant race to preserve local home values through the effective upkeep of vacant properties.

At HousingWire’s Real Estate Expo (REX Annual) on Monday, experts spoke on the subject of “Help Us Save Our Neighborhoods.” The idea behind the discussion was to visit code compliance issues, revealing effective ways to ensure property values are not weighed down by troubled and vacant properties.

Members of the panel included: Robert Klein, chairman of Safeguard Properties; Jim Taylor, senior vice president with Wells FargoHome Mortgage; Kelvin Beene with the City of Fort Worth; Jeannie Fantasia, vice president of SecureView; and Eric Miller, executive director with the National Association of Mortgage Field Services.

Taylor said, “If you look at the REOs we sold last year, on average the customer has not made a payment in 16 months. If that is the case, that customer is really in distress.”

If we cannot help the borrower, we try to find ways to help them move on while attempting to get the house back on the market, Taylor explained. But to do so, the house has to be in the best shape possible.

“We cannot stop the situation but there are ways that we can improve the communication. One of the things that has been a constant is the stigma that is tied to a boarded property,” added Jeannie Fantasia with SecureView.

To stay abreast of how property preservation firms are coming along in preserving home values, Taylor with Safeguard announced the creation of a grading system that will score houses to show how they have progressed from REO to the day the home is sold.

REO homes take longer to get back on the market, so in the process, it is imperative that communication about the home’s status is clear and up-to-date, the panelists suggested.

To view the online article, please click here.

Michael Halpern Proposes “Top-Down, Bottom-Up” Approach to Community Outreach

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

In its June edition, HW Focus published an article authored by Safeguard’s Michael Halpern, director of community initiatives, titled Community Outreach; Proposing a New Approach to Code Enforcement, City Outreach.

Community outreach
Proposing a new approach to code enforcement, city outreach

The statistics don’t lie: Communities across the country continue to struggle with vacant and abandoned properties in their neighborhoods. According to RealtyTrac figures, one in every 391 housing units in the U.S. is in foreclosure. To ensure these properties are maintained properly, local officials increasingly have proposed and enacted legislation regarding code enforcement.

Mortgage servicers utilize their field service partners to inspect and maintain vacant properties in their portfolios. They rely on field servicers to not only provide preservation services, but also to maintain open lines of communication, provide outreach and create a partnership with code enforcement to protect properties in their neighborhoods — outreach that many national field service companies are doing day-to-day. But despite these ongoing efforts, more needs to be done.

A new, broader approach involving multiple levels of government would be more effective in creating this partnership with legislators and code enforcement officials.

A “top-down, bottom-up” approach is the most effective way in building relationships with all levels of government. This includes participation at numerous statewide municipal league conferences to engage mayors, council members, cabinet heads and other decision makers.

In the search for greater transparency, this approach introduces cities to the best practices in the industry with regard to property preservation, and the positive financial and community impact these efforts provide.

By engaging multiple levels of government, the mortgage industry can collaborate with officials on proposed legislation related to the housing industry and offer cost-effective tools that can help eliminate code violations and the blight vacant properties can cause.

Open communication is critical to ensuring guidelines are met and new regulations are being followed in the current era of compliance and regulatory oversight. This new approach will provide the best way to manage property issues through a direct line of open and frequent communication.

To do this, several field service companies have created teams dedicated to building relationships with city officials and code enforcement. These teams not only participate in municipal league conferences, but also host seminars and webinars to advance education. They also work toward mutually beneficial solutions on behalf of the mortgage servicing industry.

VACANT PROPERTY REGISTRIES
An example of the solutions field service company outreach teams can provide with the top-down, bottom-up approach lies in city frustrations over the steady increase of vacant and abandoned properties in their neighborhoods. In the past few years, this frustration gave rise to the enactment of more city-based Vacant Property Registration ordinances across the country. The field service outreach teams have worked to educate city officials and offer suggestions on the language used in proposed legislation to ensure consistency with industry best practices for property preservation.

To take the top-down, bottom-up solution even further, field service outreach teams need to build relationships and approach state government officials to encourage statewide vacant property ordinances. The concept of VPRs is beneficial for both municipalities and the mortgage servicing industry in that they help reduce blight and protect neighborhoods. However, a lack of uniformity makes it difficult for servicers to comply with hundreds of ordinances and their unique requirements.

The statewide approach provides a more standardized process in addressing code violations by connecting code enforcement officials and servicers more quickly and on a broader scale.

Serving as the eyes and ears for the mortgage servicing industry, national field service companies have the opportunity to make an impact in every community across the country. But to effectively preserve properties, they need to build relationships and garner support from municipalities and code enforcement officials. The top-down, bottom-up approach engages all levels of local government in building a partnership in the fight against blight.

Michael Halpern is the director of community initiative for Safeguard Properties, the largest mortgage field service company in the U.S.

To view the article in pdf, please click here.

Kellie Chambers Shares Tips for Adapting to Regulatory Changes

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

In the June 2013 edition of Servicing Management, Safeguard’s Kellie Chambers, assistant vice president of property preservation, authored an article titled Tips For Adapting to a Changing Regulatory Environment.

Tips For Adapting to a Changing Regulatory Environment
Servicers can – and should – rely on their field services partners to stay on top of regulatory changes that affect vacant properties.

Comedian George Carlin once joked: I put a dollar in one of those change machines. Nothing changed.

Without change, businesses, industries and government agencies quickly become irrelevant to those they were created to serve – just as a dollar bill becomes irrelevant to someone who needs quarters for a parking meter.

But adapting to change can be a challenging and stressful process. This is certainly true for the mortgage servicing industry as it responds to ever-changing investor guidelines and government regulations designed to strengthen and protect the nation’s housing market.

When guideline and regulatory changes affect policies and procedures related to property preservation for vacant defaulted and foreclosed properties, the mortgage servicing industry should view their partners in the field as resources and allies to respond effectively.

Step One: What does it mean?

Whether they are guidelines to help reduce bid volumes, new property condition and timeline requirements for conveying properties post-foreclosure or changes to improve transparency around loan status, when guidelines and regulations are introduced, it is important to start by understanding what they mean and how they will affect existing processes and systems. The deeper the subject knowledge and the more diverse the perspectives to interpret the rules, the more comprehensive the evaluation will be.

Representatives from the mortgage servicing and field service sectors – from multiple organizations and various levels within those organizations – should come together to discuss the details of the new regulations, share their interpretations, reach consensus where they can and identify points that require clarification. This kind of connection can be achieved through conference calls or other forums.

One designated representative can then work on behalf of the industry to review the group’s interpretations and make inquiries to the government-sponsored enterprise or agency issuing the new requirements. This collective approach is more efficient for servicers, investors and government agencies alike in helping to ensure consistency and accuracy in implementing new guidelines and regulations across the industry.

Step Two: Roll it out

Once the industry understands the new requirements, the best course is to implement them – even if there are initial concerns.

In the roll-out phase, mortgage servicers should rely on their field service companies to track and monitor results to provide objective data to determine whether guideline and regulatory changes are working or where modifications may be needed.

Mortgage servicers also should look to their field service partners to make recommendations for and assist with updating systems and procedures to accommodate changes related to property preservation services.

Invoicing systems may need to change to reflect new pricing thresholds for bids. Manual processes may need to be automated to comply with new reporting requirements. System changes will need to be tested and verified.

Everyone involved in the new processes will need to be trained – from the mortgage servicer’s side to the field service provider’s billing staff – on all aspects of the new guidelines and regulations. Field servicers can and should take the lead to develop this training for servicers.

Also, field servicers must ensure that the vendors that perform services at properties are properly trained on the new guidelines and regulations related to repairing damages, bidding for repairs, assessing property condition and other requirements.

Step Three: Analyze and modify

After 30 or 60 days, evidence will begin to emerge to show whether new guidelines and recommendations are meeting their goals.

For example, when the U.S. Department of Housing and Urban Development issued its Mortgagee Letter 2010-18 guidelines in May 2010, the changes were designed to reduce the time frames to convey properties, reduce bid volumes for repair approvals and improve the condition of properties at conveyance.

The data demonstrated that the goals were achieved to reduce bid volumes and improve the condition of properties at conveyance. With regard to reducing the time frame for conveyance, the industry saw a trade-off. Requirements for higher levels of repairs extended the time to convey, but the result was a higher-quality product. This trade-off was viewed as worthwhile.

In another example, Fannie Mae’s new property preservation guidelines, Property Maintenance and Management: Property Preservation Matrix and Reference Guide, issued in early 2013 were designed to reduce bid volumes and provide greater transparency with regard to loan status.

An example of a previously requested practice that is now mandatory is Fannie Mae’s HomeTracker system. HomeTracker is an online tool that manages requests and bids to provide services that exceed certain allowables. It permits servicers to search property information, submit bids, receive responses and track the history of over-allowable bids.

This new technology requires that the servicer provide more information – such as loan and inspection history and date of default – to allow Fannie Mae to make more informed decisions. This resulted in a more efficient bid process and better communication between Fannie Mae and servicers.

The new guidelines also required servicers to secure properties within seven days. However, this change was inconsistent with the requirements of those servicers whose policy is to provide more notice to borrowers, resulting in higher numbers of denials and a need to respond manually to each notice. As a result, servicers are re-evaluating their rules and business practices to accommodate the new Fannie Mae guidelines.

Because mortgage servicing is a constantly changing industry, servicers should rely on their field service partners to guide them through changes in guidelines and regulations. This partnership helps servicers understand how changes will affect their business practices and respond accordingly. By working together, we can respond effectively to ensure that the services we all deliver remain relevant to protecting and sustaining a strong housing market. s

Kellie Chambers is the assistant vice president of property preservation for mortgage field services company Safeguard Properties. She can be reached at kellie.chambers@s.safeguardproperties.com.

Please click here to view the article in PDF.

George Mehok Advocates Safeguard Technology

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

In the June edition of HW Focus, Safeguard’s George Mehok, chief information officer, talks about the INSPI mobile application saving time and promoting quality in an article titled The Most Important Asset.

The Most Important Asset
A raft of new technologies strips days off property preservation work, transforming turnaround times, say field service practitioners

Some have labeled it a gimmick, others weird. Then there are those who claim it verges on evil over perceived privacy issues.

But for players in the field services industry focused on property preservation and getting the job done, the advent of Google Glass may prove quite the opposite.

Speed and cost are at the core of the field service sector, says Eric Miller, executive director at the National Association of Mortgage Field Services. “The old mantra,” he calls it.

Pre- and post-foreclosure inspections. Grass cutting. Snow removal. Trash outs. Window boardings. Swimming pool maintenance. Security checks.

In just a matter of years, the intelligence gleaned on these jobs has gone from notepad and pen plus days between information
delivery, to quasi-real-time video and reporting to mortgage servicers.

So the promise of further reduced delivery times, cost savings and upticks in accuracy holds wide appeal. Google Glass in all its space-agey computerized spectacle glory would represent another rung climbed on the technological ladder, transferring data from smartphones, tablets and computers directly into the view-field of wearers.

Already, smartphone and tablet technology has revolutionized the sector, spawning a slew of advanced applications that firms have been putting to use in a bid to boost efficiency. It’s an advance propelled by the creep of advanced mobile networks and the falling cost of devices like smartphones. Almost everyone owns one, notes Chad Mosley, the senior vice president of business development at Mortgage Contracting Services, a Plano, Texas-based field services firm in the business for 25 years.

There is a lot at stake. Statistics indicate foreclosure inventory is on the downward spiral, but there were 1.69 million as of April, according to Lender Processing Services. The total noncurrent inventory has fallen below 5 million for the first time since 2008, LPS said.

Though it’s not due out until next year, NAMFS, the industry advocacy group which counts servicers, field services companies, contractors and inspectors among its members, has requested a prototype of the Google technology. Miller says a “universal portal for delivery of work and results would allow individual companies to retain their identities while reducing errors and allow the focus to be on those properties that are truly exceptions.”

“Google Glass is similar to the smartphone ability — a single device solution — but with the power to connect to end systems at the site, possibly saving data processing lag, as well as the benefit of flagging issues upon submittal which could prevent return trips,” the former LPS Field Services assistant vice president continues.

For now, processing lags and return trips to properties are among the glitches firms hope to weed out as they put in to practice their new mobile applications.

A LOOK AT WHAT’S NEW
In February, Ohio-based Safeguard Properties — the industry’s largest property preservationist — rolled out its INSPI mobile application to “improve the efficiency and speed of field and insurance loss property inspections.”

In April, Field Asset Services of Austin, Texas, unveiled its Flexible Mobile Survey, described as an advance on the company’s FAStrack Mobile, a photo management app.

MCS, meanwhile, recently launched two new mobile technology solutions for use in the field: a free proprietary system called MCS Mobility and a third-party-provided app. Mosley sees the tech advances as key to improving delivery time and accuracy.

“Now you have vendors in the field using devices that can inspect a property, upload the results, take photos, QC (quality control) it right there on the spot and electronically transfer that information right into our proprietary system, which then feeds into our client system,” he said.

“So we’re able to get information more timely and we’re able to get more real-time information,” Mosley said. “And then it also improves the accuracy when a vendor or inspector is at a property and is taking photos. They can use some of the geotracking to verify the right location; they can QC their photos right there and upload the results right there.”

In the case of Safeguard, the INSPI technology could strip days out of a reporting process that involves thousands of occupancy inspections per day, says George Mehok, the company’s chief information officer.

On a typical day, they might receive a work order from a servicer to verify occupancy, which would then be sent on to an inspector through the firm’s “intelligent routing system.” In the process, the order is prioritized in order of urgency, with routing instructions carried out by mapping technology.

“But what’s really innovative about this is when they’re completing the occupancy inspection — and in this case let’s say last month it was occupied but this month it’s now vacant — the system will, on the device, indicate if there is a discrepancy between the last inspection and the current inspection to ensure that the inspector is at the right home,” says Mehok.

“In the past, there wasn’t any real-time interaction between the systems, its information and the inspector. Remember, they would have had a white pad and a camera,” he said. “So if, for example, the last inspector reported the property was occupied and it had a two-car garage and this time they report it vacant with a one-car garage, the system will automatically, on the mobile device say, ‘Are you sure this is a one-car garage? Because last month it was a two-car garage.’ The only reason that mobile device can do that is because it is fully integrated.”

QUALITY CONTROL
Compared to the methods employed before, the new technology boils down to an on-the-spot quality check. That’s huge, Mehok explains. “Let’s take that a step further. In the old scenario, (the vendor) would have taken the pictures and sent the results that night to Safeguard. We would have then reviewed that order because our systems will auto-recognize that there was a two-car garage. So there is no problem. We have internal quality control.”

In the final analysis, Mehok says, the time savings amounts to three days: the first lost because the inspector has attended the wrong property, the second due to the fact another visit is required to verify the correct house and the third is the timelag between re-submission of results and Safeguard’s review. Safeguard plans to extend its tech options with the release of a maintenance version called Vendor Web Mobile, now in beta mode.

Meanwhile, FAS lauds the customization potential of its new technology. This allows the firm, explained FAS President and CEO Dale McPherson in a recent press release about the system, to “move beyond generic work orders and drill down to specific details about a property that needs to be verified.”

Clients, he says, “receive additional value because of the efficiency at which we’re able to operate — days instead of weeks — from creation to deployment of the surveys, including delivery of customized reports in whatever format a client prefers.”

NAMFS’ Miller points out an industry-wide challenge — one that the likes of Safeguard and MCS say they are already surmounting — centers on technology that works across operating system platforms “for Android, Apple, Windows and Blackberry.”

A CHALLENGING FUTURE?
But what if the falling foreclosure number statistics are prophetic? Does an industry that proliferated in tandem with the foreclosure crisis now contracts, with some players seeking alternative revenue streams? The executives are coy.

“Regardless of what happens with delinquency and default trends, pre-foreclosure and post-foreclosure services will continue to be critical processes and FAS will be there providing next-generation solutions with our core real estate service products,” said Paul Carlson, FAS chief operating officer, in a statement.

Mosley, of MCS, is more direct, painting a different picture of the foreclosure climate. “We haven’t seen [a foreclosure wane] in regards to any type of trends in the amount of work. We’re actually seeing quite the opposite. There’s actually more inspections and more property preservation types of services that are being done right now.”

Nonetheless, at Safeguard, Mehok says the same technology advances could be put to use in other “inspection-oriented lines of business.”

At NAMFS, Miller — who speaks for practitioners both large and small — sees diversification as an opportunity to those only plowing the field services furrow. “There is also the reality that some may leave the industry due to a variety of reasons,” he says, pointing to pricing, volume of work and the lure of previous employment or industries as possible exit points. Other opportunities might include consumer loan inspection, construction draw inspections, direct work with banks and brokers, code compliance abatement or even work as simple as handyman services, Miller suggests. “These are some that NAMFS has presented to our membership through our annual conference or webinars,” he adds.

But, as things stand, thanks to tech advances, there are also new dynamics at work, says Miller. He highlights accuracy and auditability.

“By accuracy, I do not mean to imply old data was not accurate, just that there is now an ability to take this to a higher level, for example with geo-coding and video. Geo-coding can provide an increased level of certainty that the correct property was inspected or preserved,” he explains. “Video can more accurately demonstrate the condition of the property and surrounding areas. As far as auditability goes, with the increased scrutiny and regulation, this is the new reality of mortgage field services.”

Still, Miller says new technologies pose challenges, something that would likely steer minds should a device like Google Glass take off in the industry. “Technology does have limitations,” he concedes, “one of which is time to market, and this is magnified in the current state since regulations are so fluid. This challenge has resulted in greater communication within the industry to ensure proper time for implementation of these changes to the various technology systems.”

To view the aricle in pdf, please click here.

Robert Klein Comments on Long Island Foreclosure Spike

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

On May 10, Long Island Business News published an article titled Foreclosure Spike Coming to LI. In it, Robert Klein, Safeguard’s founder and chairman is quoted commenting on the number of inspections and maintenance work Safeguard performs.

Foreclosure spike coming to LI

Foreclosures are expected to spike on Long Island in coming months as properties protected by moratoriums stemming from Hurricane Sandy storm back into the legal process.

Fannie Mae and Freddie Mac ended a temporary ban on foreclosures in Nassau and Suffolk counties on April 30.

Voluntary foreclosure moratoriums at banks like Wells Fargo followed suit, setting up a coming wave of legal actions against delinquent homeowners.

“There’s going to be more volume coming through,” said Todd Yovino, owner of Hauppauge-based Island Advantage Realty, which helps banks maintain and market foreclosed properties. “What does that look like? It’s going to be considerably more than we’ve seen for the past two years.”

The post-moratorium increases come on top of rising foreclosure activity nationwide as the legal system gets back to work after the $25 billion robo-signing settlement signed last April.

“When we look at the data in Nassau and Suffolk we’re seeing increases in foreclosure activity,” said Daren Blomquist, vice president at Irvine, Calif.-based RealtyTrac, an online real estate data tracker. “In March, we saw some of the biggest increases we’ve seen in foreclosure activity. Most of the increase was in the new foreclosure filings, properties starting the foreclosure process.”

Foreclosure activity in Nassau increased 5 percent last April after 13 months of declines and rose in 10 of the 12 last months, culminating in a 132 percent surge in March to 794 foreclosure notices, up from 328 a year earlier.

The numbers increased slowly in Suffolk over the past year, before a 303 percent spike in March to 1,222 properties in foreclosure from 303 a year ago.

“We expected this increase, ever since the robo-signing scandal came to light,” Blomquist said. “Maybe the reason we’re seeing the bigger increase now is there were a lot of loans the lenders couldn’t foreclose on. They had to make sure they crossed their t’s and dotted there i’s.”

More than 25,000 loans are in various stages of foreclosure on Long Island and more than 17,000 local homeowners are 90 or more days delinquent, according to New York State Attorney General Eric Schneiderman.

“The number of foreclosures across Long Island is troubling, but this isn’t just a matter of numbers,” Schneiderman said. “Each foreclosure represents a devastating loss for families and communities.”

As announced this week, the state plans to sue Bank of America and Wells Fargo for not processing refinancing requests promptly, one reason for the increasing foreclosures.

Wells Fargo, meanwhile, said it’s committed to complying with the national mortgage settlement and has helped more than 70,000 homeowners through that program.

“It’s unfortunate that the New York attorney general has chosen this route rather than engage in a constructive dialogue through the established dispute resolution process,” said Jim Hines, a Wells Fargo Home Mortgage spokesman.

About 1.5 million U.S. properties were in the foreclosure process or repossessed by the bank in the first quarter of 2013, up 9 percent from a year ago, according to RealtyTrac.

Bank of America holds 11 percent of mortgages in foreclosure, while Wells Fargo has 10 percent and Chase has 7 percent, according to RealtyTrac.

“The timing is great, because the real estate market is healthy,” Yovino said. “It’s a good time for the banks to be able to shed some for this legacy debt from their books.”

The increase in foreclosure activity does offer a silver lining for firms involved in the process, including landscapers, home contractors and inspection companies.

Ohio-based Safeguard Properties, which monitors and maintains properties for banks, does 1.8 million inspections a month involving properties on which mortgages are 45 days behind.

“Even before the crisis, we were performing 700,000 to 800,000 inspections a month,” said Safeguard Chairman Robert Klein. “Now that doubled.”

Klein said banks are hiring his firm not only to inspect, but to hire contractors to mow lawns and perform other maintenance.

“We’re maintaining more vacant properties, which is a good thing,” Klein said. “Otherwise, these would be sitting there, becoming bigger problems.”

Properties heading from limbo to sale are also creating work for contractors as the banks seek to increase curb appeal for buyers.

“Everyone’s going to get a little bit busier, from the guy who installs the carpet to the engineers and attorneys,” Yovino said. “From bathrooms and kitchens to siding and roofing.”

While buyers may snap up properties at discounts, a healthier real estate market means deals won’t be as good as they were a few years ago.

“There’s always opportunity,” Yovino said. “I think the bigger opportunity has passed. There’s a lot more consumer confidence right now. As a result, people are paying greater numbers.”

And those eager to scoop up a foreclosure property may find that the deal isn’t always as attractive as it appears.

“There’s a lot of risk involved,” Yovino said. “Unless you really know what you’re doing, there’s a lot of liability. You need to know if the property’s occupied. Are you willing to sit a year for an eviction? That’s how long it takes.”

To view the online article, please click here.

Compliance Connections Surpasses 20,000 Violations

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

Compliance Connections^®Surpasses 20,000 Violations

Safeguard Properties announced that its Compliance Connections^® division has surpassed 20,000 code violations processed and 850 municipalities served, exceeding 300 percent growth in the last 15 months.

The top five states with registered municipalities using Compliance Connections^® include: Florida with 113, Illinois with 86, California with 77, Texas with 76, and Ohio with 62. Notable municipalities utilizing the service include Phoenix, AZ; Orange County, CA; Miami-Dade County, FL; Atlanta, GA; Las Vegas, NV; Cleveland, OH; and Plano, TX.

Compliance Connections^® offers a Web-based portal allowing mortgage loan servicers and municipalities to communicate immediately when code issues arise. When notices are posted, they are delivered electronically, eliminating the delays associated with mailed notices, saving time and money, and preserving the value and condition of real estate assets and the communities in which they are located.

About Compliance Connections^®Compliance Connections^® is a Safeguard Properties technology solution that provides fulfillment services in the areas of code violation and compliance. The Compliance Connections^® platform provides loan servicers, code enforcement officers, and others involved in the code violation process a secure workflow management system to track and resolve code violations. The central, Web-based location offers code enforcement officers the ability to communicate, upload documents, manage tasks, and review and update the status of code violations. Web site: www.complianceconnections.com or www.safeguardproperties.com.

On May 20, National Mortgage News published:
Compliance Connections Surpasses 20,000 Violations