Safeguard Properties

County Lawmakers Seek Remedy for Zombie Homes

Posted on by Safeguard

Updated 6/14/17: New York Assemblyman Michael Kearns (D-Buffalo) and Senator Patrick Gallivan (R-Elma) proposed legislation that aims to decrease the time a vacant property may sit in foreclosure in Erie County.

Link to A08265 (Kearns)

Link to S6580 (Gallivan)

Legislation Update
May 26, 2017

Erie County Legislature Majority Leader Joseph Lorigo knows about the zombie home issue because there is one in his West Seneca neighborhood. It is one of more than 90 in the town.

County legislators voted yesterday to ask for a change in state law which would speed up the foreclosure process, which currently leaves those homes vacant and deteriorating for up to six years.

According to Lorigo, the change would allow the county to “foreclose on properties that have been abandoned one year sooner, which means we could sell them off to people in the public who want to buy them, rehabilitate them and get them back on the tax rolls.”

It’s not clear if the problem is getting worse, although it probably has more visibility.

Albany has to change the law controlling a county foreclosure in order for that process to be sped up. Once the legislation in Albany has bill numbers in both houses, there will be a Home Rule message asking the Legislature to pass the change and for Governor Andrew Cuomo to sign it.

Source: WBFO 88.7

Additional Resource:

Resolution Intro. 10-2 (full text)

‘Clear boarding’ Replacing Plywood in Bid to Curb Foreclosure Blight

Posted on by Safeguard

Industry Update
May 9, 2017

The days of vacant, distressed homes covered in sheets of plywood appear numbered, as Fannie Mae and Freddie Mac move toward greater adoption of polycarbonate “clear boarding” to secure preforeclosure and real estate owned properties.

Fannie Mae began mandating clear boarding on preforeclosure properties last month, extending a policy enacted in November allowing the practice. The government-sponsored enterprise has required clear boarding on REO properties since 2014.

Meanwhile, Freddie Mac also issued new guidelines in April allowing servicers to use clear boarding on preforeclosure properties, “where needed and as required by local ordinances.”

“Clear boarding, which gives the appearance of a traditional window, is more aesthetically pleasing and supports neighborhood stabilization. In addition, it is more durable than plywood and provides better security,” Jacob Williamson, a Fannie Mae vice president who oversees distressed properties, said in an emailed response to questions.

The policy shifts come as rising home prices and fewer mortgage defaults have drastically cut REO inventories. Fannie Mae had less than 35,000 REO properties at the end of the first quarter of 2017, down nearly 80% from the crisis peak in the third quarter of 2010. Freddie Mac had less than 11,000 properties at the end of the first quarter, down 85% from the peak.

While the foreclosure crisis brought about myriad technology improvements and other enhancements to how servicers and their vendors manage distressed and REO properties, not much has changed in the way preservation companies secure windows and doors on these homes.

But vacant properties boarded with plywood have historically been associated with community blight and increased neighborhood crime. The large wooden boards are an obvious alert to passers-by that the property is vacant, which tends to attract the wrong kind of attention.

“The moment you put up a plywood board, you actually designate that particular house and the surrounding houses as vacant and abandoned,” said Robert Klein, chairman and co-founder of Cleveland-based Community Blight Solutions, which sells clear boarding through its Secureview division. Klein is also the chairman and founder of property preservation vendor Safeguard Properties.

Fannie and Freddie have specifications for clear boarding materials, but do not require use of a specific vendor’s product. However, Fannie Mae’s recent bulletin names both SecureView and InvisiBoard, a clear boarding product sold by Tampa, Fla.-based property preservation vendor Cyprexx Services.

The move toward clear boarding comes as some local and state governments have outlawed the use of plywood on vacant properties, including Ohio, which became the first to enact a statewide ban on plywood last month. Community Blight Solutions lobbied on behalf of the law, known as House Bill 463, according to Ohio lobbying records.

“Our goal is to get houses back on the market as fast as possible before they become blighted properties… that are unattractive to buyers,” said Adam Hewitt, a lobbyist who represents Community Blight Solutions and the Ohio Mortgage Bankers Association, among other clients. “We are creating a housing market that is affordable to a lot of families that wouldn’t normally be able to afford it.”

When clear boarding is installed, it’s more difficult for passers-by to tell if a property is occupied or vacant. And the plastic sheets are stronger than plywood, making break-ins less likely.

But that extra durability doesn’t come cheap, as the cost of installing clear boarding runs about 70% higher than plywood, according to estimates in a study commissioned by Community Blight Solutions.

Still, clear boarding proponents argue the higher upfront costs are more than offset by higher home values and lower maintenance and security costs for servicers and municipal governments.

“While clear boarding is initially more expensive than plywood, we believe the higher up-front cost is reduced over time by the durability of clear boarding,” said Williamson. “Unlike plywood, clear boarding does not deteriorate and need to be periodically replaced.”

Source: National Mortgage News (full article)

Brooklyn Court Quietly Moves to Toss Out Hundreds of Foreclosure Cases

Posted on by Safeguard

Industry Update
May 8, 2017

BROOKLYN — Kings County Supreme Court is about to quietly dismiss thousands of foreclosure cases on Tuesday — in what lawyers say will deal a severe blow to homeowners with pending cases.

The court said it planned to dismiss all cases filed before Jan. 1, 2016 that have seen no court activity after Sept. 30, 2016.  It quietly published a notice of the administrative dismissal in the New York Law Journal on Thursday, April 27, giving parties until Monday, May 1 to contact the court to keep their cases alive.

Foreclosure defense lawyers say that while it might seem like a good thing for foreclosure cases to be dismissed, it would in fact be extremely negative for homeowners battling lenders. For one, all of the motions a homeowner had filed taking issue with the lenders’ claims would be lost. In addition, many of the delays could be due to the lenders dragging their feet, lawyers say, but dismissing the case without fault to either side would allow the lenders to relaunch their case with a blank slate.

In addition, lawyers say that it’s highly unlikely that most of the self-representing owners would have seen the notice buried in the “Court Notes” on page 11 of the journal last month.

“None of the homeowners received actual notice of this calendar call. They have legal defenses and rights they are going to lose,” said K. Scott Kohanowski, director of foreclosure prevention and LGBT advocacy projects at the City Bar Justice Center.

Kohanowski said the foreclosure action is also a racial justice issue since it disproportionately affects communities of color that are affected by the foreclosure crisis.

Many legal aid attorneys plan to pack the courtroom on Tuesday, trying to assist as many homeowners as they can, and Public Advocate Letitia James is calling on the court system to stop the action.

“I am extremely troubled by Kings County Supreme Court’s tactless plan to dismiss these civil action cases,” said Public Advocate Letitia James. “In an effort to eliminate backlog the court is in fact undermining due process to some of our most vulnerable New Yorkers who rely on the courts to secure justice. The implications of this action will harm thousands of lives and I urge them to immediately cancel the ineffective and inappropriate ‘dismissal calendar’ and to prioritize justice for New Yorkers who need us most.”

She wrote a letter Monday to the Office of Court Administration asking it to cancel the dismissal action.

She also asked that if it were to be rescheduled, then notice must be sent to all parties with at least 30 days advance notice, along with information about free legal services that can help respond to the dismissal.

In the letter, she stated, “This is especially troubling given the context of rapid gentrification in Brooklyn neighborhoods heavily impacted by the foreclosure crisis.”

The Office of Court Administration received the public advocate’s letter and is reviewing it, according to spokesman Lucian Chalfen.

“This is an effort to expunge dead cases,” he said.  “As we continue to work on case backlogs, we rely on accurate data so we know where to focus our resources. Notice regarding these administrative dismissals was widely disseminated through the New York Law Journal and approximately 40 bar associations. In addition, should a litigant want the case restored, it can be without prejudice.”

There will be roughly 6,500 cases dismissed under the court action — 1,600 of which are foreclosures — according to officials from the Office of Court Administration.

Despite the May 1 cut-off date posted in the journal, cases could still be restored without further action, Chalfen said.

Lawyers have complained that since the Brooklyn courts were reorganized more than a year ago to consolidate foreclosure cases — whittling the 25 judges previously assigned to handling such cases down to just four judges — the reforms seem to focus more on resolving cases quickly to clear the backlog than considering the facts of the case and giving homeowners a fair hearing.

Advocates have called this approach “the Rocket Docket,” saying the process harms homeowners, especially those representing themselves in court.

But OCA officials said the streamlining is a good thing.

“They are being dealt with by dedicated judges in an organized and efficient manner,” Chalfen said.

Foreclosures in Brooklyn, particularly the eastern part of the borough, have been rising since the height of the financial crisis, according to a February report by PropertyShark. Overall, foreclosure cases represent about 26 percent of total cases in the Brooklyn court system, according to legal experts.

In 2016, 417 homes in the borough were scheduled for auction for the first time, compared to 176 in 2012, the site found. Nearly 3,700 homeowners received a notice of pre-foreclosure in 2016. Half of the new foreclosures were concentrated in five ZIP codes, covering Canarsie, Flatlands, East New York and East Flatbush.

Source: DNA Info

Bringing Law Firms and Servicers Together

Posted on by Safeguard

Industry Update
May 11, 2017

On May 10, representatives from the leading mortgage servicers and default servicing law firms in the U.S. met at the Fairmont Hotel in Dallas for the 2017 Legal League 100 Servicer Summit to discuss issues currently impacting business.

The Servicer Summit is a biannual gathering of leaders from the mortgage servicing and legal communities focused on fostering conversation and learning from each other.

“This is, in many ways, a new industry,” said Summit Keynote speaker Steve Bartlett. Bartlett has served the industry for many years, as a member of the House of Representatives, the Mayor of Dallas, President and CEO of Financial Services Roundtable, and currently as the Senior Advisory Board Member at Treliant Risk Advisors.

“We had to develop a new system,” Bartlett continued. “That’s what this group has done. They have developed a whole new approach and a whole new set of standards that serves the country and serves this country well.”

Topics discussed included the current low volume market. Attendees listened to a panel of professionals discuss the best practices law firms should institute to spur business growth. On the panel was first time Summit Attendee Allen Price, SVP of Business Development at RoundPoint Mortgage Servicing Corporation.

“At RoundPoint, we always look to work with law firms who are interested in building true partnerships rather than simple relationships,” Price said.

“There will always be firms that are unwilling to do anything above and beyond than what they were hired to do. And, that’s fine, they have their place.” Price continued, “But, you also want to have collaborative relationships with law firms that are more forward-thinking – firms that bring you more business or provide thought leadership.”

Price saw the value in the Summit as a place that brings together law firms and servicers to discuss pressing issues. “Having both of us in the room is a great idea. It spurs conversation and generates ideas,” Price said.

During the panel titled “The New Normal: Achieving Success in A Low Volume Climate,” Michelle Gilbert, President and CEO of the Gilbert Garcia Group, led a discussion on business growth.

Gilbert called the panel an “incubator where we can provide ideas to the firms about how to thrive during periods of low volume.”

“The Legal League Summits provide an opportunity to meet with clients and other attorneys to learn in a great setting,” Gilbert said of the Summit. “What is ancillary to the summit is my ability to meet new clients. I’ve found anything connected to the summit to be productive to my practice and to elevating the industry. No other industry group provides what the Legal League provides.”

Source: DS News

Trump Picks Pam Patenaude to Serve as HUD Deputy Secretary

Posted on by Safeguard

Updated 6/14/17: HousingWire published an article titled Senate Banking Committee Advances HUD Deputy Secretary Nominee Pam Patenaude.

Link to article

Updated 6/5/17: HousingWire published an article titled Confirmation hearing for HUD Deputy Secretary nominee Pam Patenaude set for June 6.

Link to article

Industry Update
April 28, 2017

Currently serves as president of the J. Ronald Terwilliger Foundation

HousingWire Woman of Influence Pam Patenaude was originally shortlisted to serve as the Secretary of the Department of Housing and Urban Development. That position ended up going to Ben Carson, as HousingWire first reported.

Now in another HousingWire first, President Donald Trump plans to install Patenaude in the true position of power at HUD – deputy secretary.
 
Back in November, rumors began to emerge that the Trump administration was considering Patenaude, who currently serves as the president of the J. Ronald Terwilliger Foundation for Housing America’s Families, to serve as the HUD secretary.

The HUD secretary, like many other Cabinet positions, is the public face of the department, conducting meetings with housing leaders around the country, listening to local concerns, and celebrating milestones.

The deputy secretary, however, handles most of the day-to-day operations. And the Trump administration announced Friday that Patenaude is its choice to serve in that key role.

Readers of HousingWire will likely be familiar with Patenaude, as she was featured on the cover of HousingWire Magazine last year, and previously recognized as one of HousingWire Magazine’s Women of Influence in 2013.

In fact, Patenaude’s inclusion as a HousingWire Woman of Influence was actually noted in the White House’s announcement of her appointment. From the White House:

Ms. Patenaude is currently the President of the J. Ronald Terwilliger Foundation for America’s Families. Previously, she served as Director of the Bipartisan Policy Center Housing Commission. Ms. Patenaude earned her B.S. from Saint Anselm College and her Master of Science Community Economic Development degree from Southern New Hampshire University. Her awards include: HousingWire 2013 Woman of Influence and the Saint Anselm College Alumni Award of Merit 2006.

Patenaude is a former adviser to Presidents Ronald Reagan and George W. Bush. During the younger Bush’s administration, Patenaude served as HUD assistant secretary for community, planning and development.

Here’s a more complete look at her bio:

  • Executive vice president of the Urban Land Institute and founding executive director of the ULI Terwilliger Center for Workforce Housing
  • HUD assistant deputy secretary for field policy and management
  • HUD assistant secretary for community, planning and development
  • State director and deputy chief of staff for U.S. Senator Bob Smith
  • Vice president of Manor Homes Builders
  • Administered the Section 8 rental assistance program at the New Hampshire Housing Finance Authority

Patenaude will now go through a Senate confirmation before taking over officially at HUD, if approved.

Source: HousingWire

Pennsylvania Ponders Fast-Track Foreclosure Bill

Posted on by Safeguard

Legislation Update
April 5, 2017

MEMORANDUM
Posted:  January 25, 2017 01:20 PM
From:  Senator John P. Blake and Sen. David G. Argall
To:  All Senate members
Subject: Expedited foreclosure for vacant and abandoned property
 
We invite you to co-sponsor our legislation that provides for an accelerated foreclosure process for vacant and abandoned property. This is an anti-blight, community economic development bill.

Blighted properties continue to be a major problem for our boroughs, townships and cities. Local officials tell us that many properties in foreclosure are abandoned. These properties often become dangerous eyesores that reduce the property values of taxpaying homeowners in the neighborhood. What’s more, studies show that these properties also become prime locations for increased criminal activity, thereby reducing public safety.

The foreclosure process in Pennsylvania lasts from 300 to 540 days. In that time, these properties continue to decay and to deplete municipal resources. As noted above, with reduced property values for neighbors, the housing market stagnates. Through our bill, we can reduce the timeframe for foreclosure on abandoned and vacant property by 240 days.

Specifically, this bill will limit the use of the expedited foreclosure process to vacant and abandoned properties. It provides a process to have a property certified as vacant and abandoned, either by a municipal code officer or through judicial certification, before an expedited foreclosure may commence. The legislation also specifies the process a lender must follow when using expedited foreclosure on these properties.

Previously introduced in the last session as Senate Bill 1191, a companion to House Bill 1954, this bill is the culmination of four years of work by the bicameral, bipartisan Blight Task Force. Stakeholders, including representatives of local government, the banking community and housing advocates have been involved in the discussion and drafting processes. Additionally, we received testimony on the draft legislation in a joint hearing of the House Urban Affairs Committee and the Senate Urban Affairs and Housing Committee.

Since 2009, eight states have enacted expedited foreclosure laws as a way to help local governments and responsible taxpayers maintain and rebuild their communities.

Source: Pennsylvania State Senate

Additional Resource:

SB 471 (information and full text)

Safeguard Properties Fast-Track Legislation Resource Center

Oklahoma Bill Allows Abandoned Property Registration

Posted on by Safeguard

Legislation Update
April 24, 2017

Research Analysis
The measure provides an exception to the prohibition that prevents municipalities from registering real property. The exception would allow municipalities to register dilapidated and abandoned property.

Fiscal Analysis
The measure provides authorization for a municipality to require the registration of dilapidated and abandoned buildings upon notice and hearing during the abatement process. The provision does not require municipalities to undertake such registration and no fee or fine structure is included.

Source: Oklahoma State Legislature (bill information)

Additional Resource:

OK HB 2620 (bill information)

*Previous legislation that prohibited municipalities from registering real property.

NMSA Announces New Chairperson

Posted on by Safeguard

Industry Update
April 14, 2017

During the annual National Mortgage Servicing Association (NMSA) member meeting in Washington D.C., on April 5,  NMSA announced the appointment of Ray Barbone, EVP of Mortgage Services at BankUnited, as the new Chairperson. Barbone assumed the position recently vacated by J.K. Huey, SVP at Wells Fargo, whose term ended in April. Huey won’t be ending her service to the group near term however, as she was named chairman emeritus of NMSA in recognition of her decades of service to the mortgage industry and her longstanding support of the organization.

Huey served as NMSA Chairman from 2015-2017, and prior to Wells Fargo, has held management positions at several leading mortgage organizations, including IndyMac, Washington Mutual, and Homeside Lending. She has also chaired numerous organizations in the mortgage industry, and served as an executive board member for several strategic groups.

“What an excellent experience this has been, to work with industry colleagues to encourage and drive needed changes for our industry,” said Huey. “A great deal of work has been accomplished because of NMSA members and our Five Star partners, and I can’t thank these leaders enough for all they have done. As I transition this over to Ray Barbone, I know I am leaving this group in great hands.”

Barbone brings several decades of experience to the NMSA. Prior to serving at BankUnited, Barbone was group SVP for operations at ABN AMRO Mortgage Group in Jacksonville, Florida, and before that spent 14 years as controller and SVP at Atlantic Mortgage & Investment Corp.

Barbone’s service to the mortgage industry was recognized in 2015 when he was announced as a recipient of the 2015 Lifetime Achievement Award from the  Five Star Institute.

“The NMSA members represent a significant majority of the market and, as an association, have done some wonderful work on behalf of the industry over the years,” said Barbone “I appreciate the opportunity to be a member these past years and honored to be selected for this leadership role. I look forward to working with the NMSA membership in our continued efforts to advocate for consumers, homeownership and the industry.”

The NMSA is a nonpartisan organization driven by top level executives and leaders to effect progress and change on the key challenges that face the mortgage servicing industry. NMSA member corporations represent over 80 percent of the mortgage industry.. The NMSA meeting hosted various leaders, policy makers, and agencies including most recently the Consumer Financial Protection Bureau Director Richard Cordray to discuss critical issues impacting the mortgage servicing industry.

Source: MReport

Monroe County said it wouldn’t repay towns for demolishing zombie homes. The towns sued

Posted on by Safeguard

Updated 11/9/2017: The Democrat & Chronicle published an article titled Towns win suit against Monroe County over zombie home cleanup fees.

Link to Article

Industry Update
April 28, 2017

The towns of Brighton and Irondequoit are taking Monroe County to court over unpaid property clean-up costs for mowing unkempt lawns, performing property maintenance and even tearing down vacant, abandoned buildings.

At issue is a county directive issued earlier this year saying that it would no longer reimburse towns for those fees, which are typically added to the town’s portion of a property’s tax bill. Previously, even when property owners failed to pay their taxes and added-on fees, Monroe County would nonetheless make towns whole for their full tax levy.

The county notified municipalities in late December that it was changing its longstanding practice — and applying the changes retroactively to maintenance done in 2016 —  sparking outcry from other government officials.

“While this is an important issue for Brighton and Irondequoit, it really is an issue for all the towns,” said Brighton Supervisor Bill Moehle. “We believe the county’s move is illegal, and what it does is prevent Brighton and Irondequoit and the other towns from effectively handling those properties that need maintenance or in extreme cases, demolition.”

The unpaid fees are substantial in some communities: Irondequoit incurred more than $250,000 in property clean-up charges in 2016, Greece incurred more than $83,000, Gates incurred more than $77,000 and Hamlin more than $66,000.

On Thursday Brighton and Irondequoit filed an Article 78 proceeding in state Supreme Court, asking that the court order the county to keep making the payments.

According to the suit, “the county’s position ignores its mandatory statutory obligations, and disregards over 80 years of New York State case law, administrative opinions and the plain language of the New York Real Property Tax Law and Monroe County Code.”

Monroe County spokesman Brett Walsh said the county has not yet seen the towns’ filings.

“While the county does not respond to pending litigation, in this case it is impossible given the fact that it is not in receipt of the purported lawsuit,” he said. “We are confident that the courts and the public will see that the county meets its obligations to our municipal partners. This suit by two towns attempts to force residents in other towns throughout this county to subsidize their town budgets.”

Moehle said he is still hopeful an agreement can be hammered out before the case is heard in court. He said the “illegal” policy runs counter to taxpayer support for shared government services and cost-cutting measures.

“Under this, instead of having just the county doing all tax enforcement, this would require every municipality to take action to enforce these fees themselves,” he said. “That means each municipality having to hire lawyers and getting their own liens enforced.

“This is not just bad law, it is bad government policy.”

Irondequoit Supervisor David Seeley said the biggest concern is that the county’s move will hobble efforts by his and other towns to address ongoing problems with deteriorating vacant homes or unkempt properties.

“People bring up the dollars and cents of this, but I’m more worried about enforcement,’ he said. “If we have no recourse in enforcing these charges, what leverage do we all have in making our homeowners pay them? This leaves us all powerless to enforce town code.”

Seeley said the court action was a last resort.

“I would love to work with the county on this crisis of dealing with zombie homes,” he said. “I’ve seen it elsewhere in upstate where you have counties and towns working together to take on these zombie homes, and I feel like what Monroe County is doing here is just making it harder for us to deal with this.”

A court date has not yet been set to hear the case.

Source: Democrat & chronicle (full article)

Maryland Expedited Foreclosure Bill Passes Assembly

Posted on by Safeguard

Updated 10/31/17: The Office of the Commissioner of Financial Regulation (Maryland Department of Labor, Licensing and Regulation) issued an advisory announcing the creation of a new form that is to be used by secured parties in expedited foreclosure proceedings for vacant and abandoned properties.

Link to advisory

Updated 7/6/17: DS News released an article titled Opportunity and Risk in Maryland’s Fast Track Foreclosure Process.

Link to article

Updated 5/25/17: Maryland Governor Larry Hogan has signed SB 1033 (Residential Property – Vacant and Abandoned Property – Expedited Foreclosure). The law will take effect on October 1, 2017.

NOTE: This bill was cross-filed with HB 702.

Link to bill info

Additional Resources:

MReport (Maryland Gov. Signs Fast-Track Foreclosure Bill)

DS News (The Fight Against Blight in Maryland)

National Mortgage News (Maryland governor signs bill to fast-track vacant home foreclosures)

Safeguard Properties Fast-Track Legislation Resource Center


Legislation Update
April 5, 2017

Synopsis:

Authorizing a secured party to petition a circuit court for leave to immediately commence an action to foreclose a mortgage or deed of trust on residential property if the property is vacant and abandoned under specified circumstances; requiring a secured party to send a copy of a specified petition to specified persons under specified circumstances; requiring a court to rule on a specified petition promptly after the petition is filed; applying the Act prospectively; etc.

Source: General Assembly of Maryland (information and full text)

Additional Resource:

Safeguard Properties Fast-Track Legislation Resource Center