Safeguard Properties would like to congratulate Greg Robinson for being a finalist in Crain’s 2010 CFO of the Year Award.
?
?
My Walk 4 Friends Event
On September 6th, more than 70 Safeguard employees participated in the inaugural My Walk 4 Friends to benefit the Friendship Circle, which provides programs for children with special needs.? Safeguard was proud to be the presenting sponsor for this walk.? The event raised nearly $150,000, and Safeguard’s team ranked #1 with donations totaling $7,628.
?
To view the media coverage of the My Walk 4 Friends Event, 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 approximately 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 expands its headquarters
As discussed in National Mortgage Professional, Safeguard Properties CEO Alan Jaffa announced a 7,500-sq. ft expansion to its headquarters facility.
Safeguard Properties expands its headquarters
Safeguard Properties Chief Executive Officer Alan Jaffa has announced a 7,500-sq. ft. expansion of its existing 58,000-sq. ft. headquarters facility. Safeguard Properties inspects and maintains defaulted and foreclosed properties for lenders, mortgage service companies and other financial institutions. The expansion space is located in a 20,000-sq. ft. mezzanine that the company built above its new headquarters building to accommodate planned growth. When fully built out, Jaffa said the headquarters will total 78,000-sq. ft. and accommodate more than 1,000 staffers.
Since moving into its new headquarters in Spring of 2009, Safeguard?s employment has grown from 650 to more than 800. The expansion will provide work space for 85 additional staffers, plus conference rooms, a break room and other common areas.
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 approximately 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.
?
?
?
?
Mitigating REO Losses
Robert Klein, Founder and Chairman of Safeguard Properties, was featured in a Mortgage Servicing News article titled, Mitigating REO Losses.
Mitigating REO Losses
Of the 1.3 million inspections field service vendor Safeguard Properties conducts monthly on a nationwide basis, between 20%-28% of presale properties become vacant before they are even referred to foreclosure.
“The borrower, for some reason or another, just decides they are out,” said Robert Klein, chairman of the board and founder of Safeguard Properties, during the Mitigation REO Losses panel at the SourceMedia Second Annual Best Practices in Loss Mitigation Conference in Dallas.
From a servicer standpoint, if the information in the loan file is not clear regarding the assignment and title chain, it is worth it to “spend a few bucks” to get a copy of the recorded mortgage and all assignments attached to that mortgage, added Mike Wileman, president and CEO, Orion Financial Group.
“You can start piecing together the chain and what has to happen in order to get it cleaned up,” he said.
“Time is money. Even the foreclosure courts say if you can’t show a valid recorded lien, many times since you are the owner of that mortgage, they are now allowing foreclosure to proceed.”
Real estate-owned assets present innovative opportunities for the investor market, according to panelist Alan Paylor, president of REO Leasing Solutions.
If an individual investor or a portfolio buyer purchases REO homes, Paylor said there is an opportunity to mitigate loss through cash flow.
“You also have the ability to do a little bit of mitigation on your taxes and insurance. A vacant property is the worst thing to have. Communities fail. If you can lease that property out for even a short period of time, you provide a resource for the community and a resource for a person that needs that property,” he told the audience.
“It’s cash flow, taxes and insurance. If you have an REO portfolio, you can think about bundling it to sell. A fully leased portfolio in the property management world is a product we offer to foreign investors and investors.”
The pre-REO Deed for Lease program from Fannie Mae is a “temporary solution,” he said.
“They are looking to remove the asset off of their books. If they can do that while they satisfy the Obama tenant possession process, they do. We treat it as ‘every asset manager should look at it as an arrow in the quiver. Pull it all out. Shoot that leasing arrow and keep that property occupied.’ Keeping the property occupied is the name of the game. Keep somebody in the property and you won’t get a vandalized, vacant property where the loss gets greater,” Paylor said.
When it comes to marketing bank-owned assets, Klein told conference attendees that these homes cannot be sold today as “REO” because the competition is the next-door neighbor.
These buyers live in the home and are maintaining the property while lowering the sales price.
“If you want to sell that property you have to make it comparable. The industry has taken certain steps to do that,” Klein said during the session.
“The lawn is maintained and manicured. The property next door is not. The price is almost the same. My friend has a saying, ‘If I have a block that has 10 boarded houses on the block, I want my house to be the nicest boarded house on the block.'”
Safeguard applies a monthly maid service “refresh” to keep the property in marketable condition. This includes a periodical “sprucing up” to remove small amounts of debris, dust and cobwebs that accumulate.
Every cobweb could cost lenders and servicers “thousands of dollars,” he said. “To potential buyers looking at these properties in the REO world, they will try every single excuse to lower the price.”
The field service industry is making sure the property is comparable and the lawn is manicured. Safeguard clients are rating the company on maid service, including white-glove inspections on these homes.
“You are not going to put $20,000 into a property and not get any money out of it. It makes a much bigger difference when you clean it out and there is no trash, no debris. The fans are clean. There are no cobwebs and it smells good. Use air freshener. A property that smells like an REO is going to sell like an REO. Even though it’s not repaired we want somebody, a young couple who is an end user, where they can visualize taking the property and building a future in that home.”
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 approximately 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.
?
?
?
?
?
?
?
Helping to Facilitate Short Sales
Robert Klein, Founder and Chairman of Safeguard Properties, contributed an article to REOMac Update titled, Helping to Facilitate Short Sales.
Helping to Facilitate Short Sales
Two years ago, the high rates of defaults and foreclosures were blamed on subprime loans with variable rates. But subprime loans are gone, and defaults and foreclosures continue to occur at the same pace.
The Mortgage Bankers Association reported recently that in the first quarter of 2010, more than one-third of new foreclosures were on prime loans with fixed rates. These are loans held by what would normally be considered the safest borrowers with good credit scores.
We now know that the real culprit in the housing crisis is unemployment. As long as the unemployment rate remains at ten percent, borrowers will not be able to afford their mortgage payments, even if they take advantage of loan modification programs available to them.
The federal government launched the Home Affordable Foreclosure Alternatives (HAFA) program in an attempt to increase short sale activity as an alternative to foreclosure. And many servicers are making short sales a priority over REO sales. Recently Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions reported that more than 17 percent of home purchases were the result of short sales.
High inventories of vacant properties invite all of us working in and on behalf of the mortgage industry to identify and explore new and better ways to help banks and servicers facilitate short sales to move defaulted loans from their portfolios.
More importantly, our goal should be to reduce vacancies in defaulted properties and to assure that they remain viable and attractive for new homeowners to raise families. The faster a defaulted property can be sold, the less likely it is to become a troubled vacant property.
Opportunity with for-sale defaulted properties
As a proactive measure to help defaulted homeowners avoid foreclosure, and to reduce the number of vacant properties in their portfolios, servicers have attempted to communicate with borrowers to initiate workouts and loan modifications. Unfortunately, many borrowers have been either frightened or misinformed and thus have not responded to these outreach efforts.
As a result, even though many defaulted homeowners have their properties listed for sale, their lenders and servicers are not aware. These are opportunities lenders and servicers are missing to pursue short sales.
If these defaulted homes do not sell, it is likely that many will eventually be abandoned by the homeowner. Once abandoned, these properties will lose value faster, cost the servicer more in inspection and maintenance costs, and become nuisances in their neighborhoods.
In Safeguard Properties? system alone, more than 40,000 pre-sale properties are listed for sale. While some are vacant, most are occupied, and they present an opportunity for lenders and servicers to prevent larger loan losses by proactively pursuing a short sale.
All property preservation companies should be reporting these properties to their clients, including the name and phone number of the broker and any other listing information that is available.
Safeguard began reporting this information to its clients several months ago, and although we do not have data on the results, our clients have expressed appreciation and an interest in continuing to receive the information.
As servicers refocus their energies on short sales, more REO brokers have shifted their strategies to incorporate short sales as well.
Field servicers and real estate brokers have had a long-standing relationship working together to maintain and market REO properties. The short sale market offers an opportunity for our industries to unite in the interests of homeowners, lenders and servicers, neighbors and entire communities. Reduced housing prices and short sales also create homeownership opportunities for first time buyers who could not afford to purchase a home in the future.
In the end, we all benefit when we work together to reduce the time a property is vacant and help assure that properties retain their appeal as owner-occupied residences, and neighborhoods remain safe, attractive and vibrant places for homeowners to raise their families, work and play.
Robert Klein is founder and chairman of Safeguard Properties, the largest privately held mortgage field services company in the U.S.
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 approximately 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 Properties Expands Marketing and Business Development Team
As discussed in DSNews, Alan Jaffa CEO of Safeguard Properties, appointed Tod Burkert as Vice President of Business Development and Anthony Golden as Director of Strategic Initiatives.
Safeguard Properties Expands Marketing and Business Development Team
Safeguard Properties, the largest privately held mortgage field services company in the United States, has expanded its marketing and business development team with two new appointments. Tod Burkert has been named vice president of business development, and Anthony Golden has been named director of strategic initiatives.
?Tod and Anthony are strong additions to assure that Safeguard is well positioned for growth in our core business and expansion into new lines of business,? said Alan Jaffa, CEO of Valley View, Ohio-based Safeguard. ?Tod brings an impressive track record in business planning, sales, and marketing, and Anthony is a well-known and highly regarded veteran servicer and subject matter expert in our industry.?
Burkert has been awarded several sales and marketing accolades for his previous work, which includes executive sales and marketing positions with Turning Technologies, Cintas Corporation, and RUS OMNI. Prior to these roles, he graduated from the U.S. Naval Academy and served as a Navy pilot, participating in Operations Desert Shield and Desert Storm.
To his new position, Golden brings nearly 28 years? experience in mortgage loan servicing. Before this appointment, he served as a consulting manager for Clayton Services LLC, and he has held executive- and management-level titles with GMAC-RFC, Budget Finance Company, and Great Western Bank. In addition, Golden is actively involved in the industry through participation in trade organizations, speaking at conferences, and writing articles for trade publications. Golden attended California State University, Northridge, with a study emphasis in business administration.
Burkert and Golden join Safeguard?s more than 800 employees-not counting its network of thousands of contractors-all of whom work to provide inspection and maintenance services for lenders, mortgage servicers, and other financial institutions.
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 approximately 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 Properties Appoints New VP and Director
As discussed in HousingWire, Alan Jaffa CEO of Safeguard Properties, appointed Tod Burkert as VP of Business Development and Anthony Golden as Director of Strategic Initiatives.
Safeguard Properties Appoints New VP, Director
New Safeguard Properties CEO Alan Jaffa appointed Tod Burkert as vice president of business development and Anthony Golden as director of strategic initiatives.
Jaffa made the appointments two months after being appointed himself as CEO, ?taking the helm of the property preservation company after its founder Robert Klein decided to transition to chairman of the board. Safeguard celebrated its 20th anniversary in May.
?Tod and Anthony are strong additions to assure that Safeguard is well positioned for growth in our core business and expansion into new lines of business,? said Jaffa. ?Tod brings an impressive track record in business planning, sales and marketing, and Anthony is a well known and highly regarded veteran servicer and subject matter expert in our industry.?
Before joining Safeguard, Burkert was in charge of executive sales and marketing at Turning Technologies, a polling and reporting software development company. He is a graduate of the US Naval Academy and was a former Navy pilot.
Golden holds almost 28 years of experience in mortgage loan servicing. He arrived at Safeguard from Clayton Services, where he was a consulting manager. He?s also held positions at GMAC and Great Western Bank.
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 approximately 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.
?
?
?
?
REO Insider Article
Robert Klein, Founder and Chairman of Safeguard Properties, was featured in a REO Insider article titled, Safeguard’s Robert Klein: Sights and smells key to selling REO.
Safeguard?s Robert Klein: Sights and smells key to selling REO
To close out Thursday?s SourceMedia loss mitigation conference, a panel addressed issues of loss mitigation in the REO process.
Robert Klein, founder and chairman of property preservation company Safeguard Properties, told the panel the stakes are much higher now when it comes to getting REO properties ready for sale.
Previously, REO properties were marketed as such. Since they sold for significantly less than other houses, that was all you could do, Klein said. But now, with the margin between traditional sales and REO sales more narrow, there is a greater emphasis placed on an REO property?s ability to compete with traditional sales. If you want to sell an REO property these days, you have to make it comparable to others on the market, Klein said. To do that, companies like Safeguard are stepping up their game.
?They?re doing white glove inspections on these homes, and I tell you what, it pays off,? Klein said. ?Every cobweb is going to cost you $5,000. If the potential buyer comes in, they?re going to come up with every excuse to lower the price.?
Any real estate agent ? REO or otherwise ? will tell you the way a house smells is important when you have a house listing. It?s the whole ?making a house smell like fresh baked cookies? concept. You have to make house hunters want to buy the property. Klein said it?s one of the easiest things to do, but not doing it can cost you.
?If it smells like an REO, it will sell like an REO,? he said.
Safeguard does somewhere in the neighborhood of 1m home inspections every month, Klein said. And while some of the names have changed ? ?trash outs? are now called ?maid service,? ?cash for keys? is ?relocation assistance? ? the guiding principles are still the same.
The changes can be simple, he said. ?What we want to create is something that a young couple can visualize taking the property and building a future in the home.?
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 approximately 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.
?
?
?
?
Detroit blight to be tracked by law
Robert Klein, Founder and Chairman of Safeguard Properties, was featured in a Free Press article that discusses Detroit’s recently passed vacant property registration ordinance.
Detroit blight to be tracked by law
Owners of vacant homes must now register
Detroit is battling its ongoing problem of vacant homes and blight with a new law that holds property owners more accountable.
The Detroit City Council approved the Vacant Property Registration ordinance this month, joining hundreds of municipalities nationwide, including Grand Rapids, West Bloomfield and Dearborn, with similar policies.
The ordinance — sponsored by Councilman Kwame Kenyatta with support from Karla Henderson, the city’s Building Safety Engineering director — requires the owners of vacant properties, from individual owners to lenders, to register them with the city for a $25 per structure annual fee.
The registry is expected to allow city officials to better track property owners, to consistently levy fines and to hold owners accountable for their properties before and after they become blighted. The city already required rental homes to be registered.
“We do know that there are some good property owners,” Henderson said. “We’ll leave them alone and start going after the ones that aren’t.”
In March, the Southeast Michigan Council of Governments reported that there were 6,448 new foreclosures in Detroit from August 2009 to February 2010, bringing the number of foreclosed properties in the city to 18,993 by February. That’s in addition to thousands of vacant homes that already dot the city.
The fines for failing to register a vacant property are expected to range from $250 to $500 per citation, per property. The fines for failing to maintain a vacant property according to city codes will range, depending on the size of the structure, from $500 to $3,000 per citation, per property.
Lenders and real estate agents who initially bristled at the extra work these ordinances could create are reluctantly accepting the trend.
Carol Trowell, president of the Detroit Association of Realtors, said banks and realtors are more proactive in maintaining properties, which helps the market.
Robert Klein, founder and board chair of the Cleveland-based Safeguard Properties, which maintains properties for lenders nationwide, including in Detroit, said there’s a legitimate need for cities to have ordinances such as this but said the lack of uniformity presents a hardship for the industry because requirements vary from city to city.
Safeguard maintains thousands of homes in Detroit, according to its Web site, but also has about a dozen listed on the city’s Web site targeting blight.
“There’s hundreds and thousands of properties that are vacant,” said Klein, speaking generally about vacant homes. “The vast majority are being properly maintained.”
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 approximately 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.
?
?
?
?
Taking a Buckshot Approach to the Housing Crisis
Robert Klein, Founder and Chairman of Safeguard Properties, contributed an article to Mortgage Servicing News titled, Taking a Buckshot Approach to the Housing Crisis.
Taking a Buckshot Approach to the Housing Crisis
Even though the U.S. economy is showing signs of recovery from the “Great Recession,” most industry experts predict that it will be some time before the mortgage industry can significantly reduce the portfolios of foreclosed properties.
The Mortgage Bankers Association reported that in the first quarter of 2010, almost 37% of new foreclosures came from fixed-rate prime loan mortgages held by the safest borrowers with the highest credit scores. An additional 21% of foreclosures in the quarter were on adjustable-rate mortgages made to creditworthy borrowers.
As long as the nation’s “jobless recovery” continues and unemployment rates hover around 10%, loan modification programs probably will continue to meet with limited success, and we will continue to see large inventories of defaulted and foreclosed properties.
No silver bullet will reduce servicers’ property portfolios, but the industry has been successful in taking a “silver buckshot” approach to minimize the impact.
Here are five areas in which the industry either has made or has the potential to make the greatest impact to protect the viability of properties and return them to family homeownership as quickly as possible.
No. 1: Holding the line on property preservation
Every football coach knows that to hold the line and keep from losing ground, you have to focus on the basics of blocking and tackling. The same goes for vacant properties. Especially as volumes increase, we can’t let our guard down. The better preserved a property is at foreclosure, the greater its chances are to sell faster and at a higher value.
Despite record volumes, field servicers have continued to improve operations, technologies, training and recruitment processes to keep up with demand and maintain quality standards.
Property preservation companies also are enlisting the help of neighbors, who have a vested interest to assure that a vacant property doesn’t affect their property values or risk the safety and security of their families. One program that has been successful in engaging neighbors has been Safeguard’s “Good Neighbor” initiative, in which door hangers with the company’s contact information are left at neighboring properties. Since implementing the program, the company has received an average of 1,200 calls per day in communities across the country to report everything from minor maintenance issues to significant safety concerns.
Alert neighbors have helped to prevent millions of dollars in property damage, avoid code violations, reduce vandalism and maintain the safety and security of properties and neighborhoods. We need to do everything we can to continue to support and encourage their vigilance.
No. 2: Strengthening communications between the industry and code enforcement
In the past, the industry’s goal was to stay off the radar screen of code enforcement officials. Today we know better. Code enforcement departments care more about preventing code violations than issuing citations. As an industry, we want to be on the radar screen of code enforcement officials, and the “MERS initiative” has been one of the most effective programs to make sure we are.
A creation of the Mortgage Bankers Association, this initiative gives code enforcement officials free access to the Mortgage Electronic Registration System, containing loan information on more than 65 million properties across the country. Hundreds of cities now utilize the MERS system in place of, or in tandem with, vacant property registration ordinances to locate a responsible contact when a property has a code violation.
Admittedly, the MERS Initiative isn’t a complete solution but it is a useful tool to connect code enforcement officials with servicers. Because of the successful contacts made through MERS, servicers have reduced or prevented countless code violations, security issues and maintenance problems, saving millions of dollars and keeping properties and neighborhoods safer and more secure.
Servicers that do not participate in MERS should be encouraged to do so. It is worth the subscription. Those that are on the system should be sure that their mortgage information is updated with a property preservation contact so that code enforcement officials can find the right person to address a problem more quickly.
No. 3: Making REOs stand out in the market
In today’s saturated real estate market, even traditional-sale homes are heavily discounted to help them sell more quickly. As a result, REO properties have a new level of competition.
The key to selling REO properties today is making the right investment to deliver the best “bang for the buck” that will help the property sell faster and maximize the return. Recognizing this, the industry has worked hard to make strategic investments in REO properties to maximize selling opportunities.
Even low value properties can stand out with only a modest investment. It doesn’t cost much to mow the lawn and clean up the yard, scrub the house from top to bottom, tighten what’s loose and replace burnt-out light bulbs. Yet these basic efforts can pay off in huge dividends when potential buyers don’t have to look past dirt and debris to imagine raising a family in the home.
Just as important as making the right investment and keeping the property clean and maintained have been efforts to establish more effective communications between the servicer, the property preservation company and the broker.
Once the property is listed, keeping all parties engaged and coordinated, continuing to monitor the property, as well as the market, and making sure that the property remains in top form is essential. Checks and balances between the broker and the property preservation contractors to identify and address issues quickly helps to assure that the property remains in the best possible condition and that the property is poised for a faster and higher value sale.
No. 4: Support foreclosure prevention
Preventing a foreclosure from happening at all is the best way to whittle down portfolio volumes and avoid the inevitability of even higher post-foreclosure loan losses. This is why the short-sale market is so hot right now.
Even though field servicers aren’t directly involved in short sales, they can be helpful to the process. In Safeguard Properties’ system alone, for example, more than 40,000 presale properties are listed for sale. These are 40,000 properties in default, some vacant but mostly occupied, in which the owner is attempting to sell the property. If history is any indicator, if these homes don’t sell, many will eventually be abandoned by the homeowner. As vacant properties, they are likely to lose value faster, and cost the servicer more in maintenance and repair costs.
As a pre-emptive measure, field servicers can routinely report “presale for sale” information to its servicing clients. These are ripe opportunities for servicers to reach out to the homeowner to initiate a short sale as an alternative to abandonment, and a potentially long and costly property preservation process.
There are other steps we can take to help prevent foreclosures. We can continue to encourage frightened borrowers to reach out to their servicers and attempt workouts and loan modifications. In particular, we should support the efforts of foreclosure prevention programs and their networks of nonprofit housing and credit counselors who help keep borrowers in their homes.
Even if these programs meet with limited success, some success is better than none at all. We know that an occupied property is better protected than a vacant one. Everything we can do to support homeowner retention should be done for everyone’s benefit.
No. 5: Accelerating vacant properties to foreclosure
While everything should be done to try to keep borrowers in their homes, the fact is that many defaulted homes will be abandoned by their owners for a variety of reasons.
When these homes are first abandoned, most are in livable condition. Over time, however, any vacant property will begin to deteriorate, even those that receive regular inspections and maintenance. The reason is that vacant properties are susceptible to more expensive structural damage because they are not heated, cooled and ventilated the way occupied properties are. They also are more frequent targets for vandalism.
The longer a property sits vacant, the more expensive it is for servicers to inspect and maintain, and the more value it loses. Depending on individual state laws, the foreclosure process could range from a few months to more than a year.
The problem with foreclosure laws is that they do not differentiate between occupied and vacant properties. Certainly, there is value in an extended foreclosure process to protect homeowners and try to prevent them from losing their homes.
However, when properties are abandoned, there is no homeowner to protect. A lengthy foreclosure process involving a vacant property only puts the property and the neighborhood at greater risk. A prolonged foreclosure process also prevents a vacant property from being reoccupied more quickly.
As an industry, we must get the word out and urge state legislators to review their foreclosure processes. If states updated their foreclosure laws to differentiate between vacant and occupied properties and allowed vacant properties to accelerate to foreclosure, all sides would benefit.
Communities would be safer because fewer vacant properties would pose safety risks to neighborhoods, and the properties would be less of a burden on taxpayers. Property values would be maintained, and they would support a stronger tax base. Properties also would be more likely to attract homebuyers who would take better care of the properties and raise families there.
In the end, working together to promote responsible family homeownership and protecting our housing stock so that it contributes to a community’s vitality and tax base is how we will work ourselves out of today’s housing crisis.
Servicers, investors, code enforcement officials, property preservation companies, neighborhood organizations, legislators, nonprofits and community leaders have work with a spirit of determination and collaboration to address an unprecedented housing crisis.
It is a crisis that wasn’t created overnight, and it won’t be solved overnight. We have learned that finger pointing and assigning blame are a waste of time and energy. And we have learned that we are all better served when we focus our energies on developing solutions that benefit everyone.
Robert Klein is founder and chairman of the board of Safeguard Properties, Valley View, Ohio.
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 700 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.