Reaping a Recovery

July 29, 2016

The U.S. Department of Housing and Urban Development’s release of Mortgagee Letter 2016-02 this year marked an important step in bridging the gap between investor requirements and mortgage field services best practices. It provided one standard of property preservation across the country, addressing issues like the need for additional allowables, conveyance timeframes and mold remediation, just to name a few. HUD’s Mortgagee Letter 2016-02 also updated guidelines focusing on the importance of the hazard insurance recovery process and the role the hazard insurance recovery vendor plays in this process. It requires mortgage servicers to pursue insurance recovery and to make repairs with hazard claim settlements. To comply, all lenders and mortgage servicers need to ensure they have a qualified mortgage field services provider with a dedicated staff that handles the hazard insurance recovery process to maximize recovery and reduce losses.

The mortgage field services partner plays an important role in the hazard recovery process. They are the eyes and ears of the mortgage servicer and the hazard recovery vendor. Additionally, damages are discovered when the mortgage field services provider is completing inspection and preservation services. This discovery triggers the hazard insurance recovery process.

When the initial inspection or preservation services are completed and damages are identified, it is important that these results contain the necessary documentation so the mortgage servicer, or its hazard recovery vendor, can make a determination on whether or not to file a hazard insurance claim. The documentation should include the following information:

Type of peril – Damages must be classified correctly. For example, broken pipes can be from theft or vandalism, freeze damage or mortgagor neglect or wear and tear. How the damage is reported can affect whether or not a mortgage servicer or their hazard provider will initiate a claim. It also may affect how the hazard insurance company views the claim and whether or not coverage is provided under the policy.

Description of the damage with an estimated cost to repair – Mortgage servicers need to know what is damaged, are the items missing or damaged, where the damage is located and an estimated cost to repair. Missing or damaged fixtures that are cosmetic in nature with a low estimated cost to repair may not result in a claim being initiated. For example, missing door knobs on the interior door or light fixtures can be low cost and considered a cosmetic issue, which will not justify a claim being initiated. Items considered essential to the home, like hot water tanks, furnace, plumbing systems, toilets and air conditioning condensing units have a higher cost and typically would justify initiating a claim. Sufficient details must be provided so the mortgage servicer or its hazard vendor makes an appropriate decision on whether to initiate a claim.

Date of discovery – The date the damage condition is discovered needs to be timely and accurately reported. This can significantly affect what policy was in force at the time of the loss. Inaccurate information can affect the amount of out-of-pocket costs the mortgage servicer may incur (deductible) or the timely resolution of the claim (if you file with the wrong carrier, you may have to refile). If the claim is not submitted in a timely manner, coverage can be denied.

Photos – Detailed photos that support the damage condition being reported are essential. These photos are key information the mortgage servicer or its hazard vendor need to verify the extent and cause of the damage. Photos memorialize the damages so if another event occurs there is documentation of the condition in support of the claim that was initiated. It also can significantly help in expediting the settlement of the claim and, in some cases, the hazard insurance company may issue settlement specifically based on the photos of the damage.

Once the claim has been concluded, the mortgage servicer needs its mortgage field services provider to confirm the scope and pricing issued by the insurance company accurately reflects the damages. It is important to engage a mortgage field services provider that is knowledgeable and has a skilled network of vendors that understand how the hazard insurance companies issue settlements and the documents that reflect what has been covered. The insurance carrier will typically issue two sets of documents — the Explanation of Benefits (EOB) and a scope of work that is an itemized estimate of the work. The EOB outlines the coverage provided and breaks down the settlement. It will detail if there are conditions that were not covered and if there is recoverable depreciation that can be claimed after repairs have been completed. The scope of work will provide a detailed estimate of what repairs the insurance company has estimated need to be completed to address the damages and the allowable costs.

The mortgage field services provider will need to evaluate the EOB and the scope of work from the insurance company and engage a qualified vendor to verify the accuracy of the settlement that was issued by the hazard insurance company. If the settlement is found to be deficient in pricing or scope of work to be completed, the mortgage field services provider needs to be able to prepare a package of information that the mortgage servicer or their hazard recovery vendor can present to the hazard insurance company for consideration.

This should include:

  • An itemized estimate that clearly outlines what work was not covered in the scope or work provided by the hazard insurance company or that is not priced properly. The estimate should not duplicate items that are covered in the hazard insurance company’s scope of work and only include items that were missed by the insurance adjuster or not priced properly.
  • Photos of the items that were not covered in the scope of work. These photos should clearly support the claim that the items are missing or damaged.
  • If local code requires additional work or upgrades providing documentation from the local authority or the actual wording from the building code needs to be provided along with any other documentation supporting the claim.

With HUD’s requirement to seek insurance recovery and complete repairs with the funds recovered, it is important that mortgage servicers have engaged a mortgage field services provider that has a network of vendors that can complete the repairs. Work must be completed in a timely manner and in accordance with the scope of work that was issued. If the work is not done correctly the mortgage servicer may face the following issues:

  • Delay in completing the work may result in the mortgage servicer being unable to claim the recoverable depreciation.
  • Incomplete repairs may result in the insurance carrier only issuing only a partial settlement for the recoverable depreciation.
  • Incomplete work can result in HUD issuing a reconveyance.

The mortgage field services provider needs to have a network of vendors that are knowledgeable and trained to handle repairs based on insurance settlements. A dedicated team with a quality control process that ensures all work has been completed in accordance with the scope of work will eliminate loss of recoverable depreciation funds and minimize reconveyances.

While HUD’s Mortgagee Letter 2016- 02 took great strides to improve property maintenance issues, hazard insurance recovery still remains a delicate process. Only skilled, knowledgeable mortgage field services providers with vendor networks trained to understand the process will prevent losses, improve conveyance timelines and increase financial recoveries. Those providers who have deep claims expertise are imperative for maximizing hazard insurance recovery and ensuring damages are properly mitigated at the property.

Source: DS News (Reaping a Recovery [pdf])



Alan Jaffa

Alan Jaffa is the chief executive officer for Safeguard, steering the company as the mortgage field services industry leader. He also serves on the board of advisors for SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets.

Alan joined Safeguard in 1995, learning the business from the ground up. He was promoted to chief operating officer in 2002, and was named CEO in May 2010. His hands-on experience has given him unique insights as a leader to innovate, improve and strengthen Safeguard’s processes to assure that the company adheres to the highest standards of quality and customer service.

Under Alan’s leadership, Safeguard has grown significantly with strategies that have included new and expanded services, technology investments that deliver higher quality and greater efficiency to clients, and strategic acquisitions. He takes a team approach to process improvement, involving staff at all levels of the organization to address issues, brainstorm solutions, and identify new and better ways to serve clients.

In 2008, Alan was recognized by Crain’s Cleveland Business in its annual “40-Under-40” profile of young leaders. He also was named a NEO Ernst & Young Entrepreneur of the Year® finalist in 2013.


Chief Operating Officer

Michael Greenbaum

Michael Greenbaum is the chief operating officer for Safeguard. Mike has been instrumental in aligning operations to become more efficient, effective, and compliant with our ever-changing industry requirements. Mike has a proven track record of excellence, partnership and collaboration at Safeguard. Under Mike’s leadership, all operational departments of Safeguard have reviewed, updated and enhanced their business processes to maximize efficiency and improve quality control.

Mike joined Safeguard in July 2010 as vice president of REO and has continued to take on additional duties and responsibilities within the organization, including the role of vice president of operations in 2013 and then COO in 2015.

Mike built his business career in supply-chain management, operations, finance and marketing. He has held senior management and executive positions with Erico, a manufacturing company in Solon, Ohio; Accel, Inc., a packaging company in Lewis Center, Ohio; and McMaster-Carr, an industrial supply company in Aurora, Ohio.

Before entering the business world, Mike served in the U.S. Army, Ordinance Branch, and specialized in supply chain management. He is a distinguished graduate of West Point (U.S. Military Academy), where he majored in quantitative economics.



George Mehok

George Mehok is the chief information officer for Safeguard. He is responsible for all strategic technology decisions, new systems deployments and data center operations supporting a national network of more than 10,000 mobile workers.

George has more than 20 years of leadership experience dedicated to high-growth companies in the mobile telecommunications and financial services industries, spanning startups to global industry leaders.

George played a senior role in the formation of Verizon Wireless, leading the IT product development and strategic planning team. He led the integration planning for the Verizon merger including: GTE, Vodafone-AirTouch, Bell Atlantic Mobile and PrimeCo.

As chief information officer at Revol Wireless, a VC-backed CDMA wireless communications network operator, George’s team implemented an integrated technology infrastructure and award-winning business intelligence platform.

George holds a bachelor’s degree in political science and economics from Eastern Michigan University and an M.B.A. from The Ohio State University. He is a board member of Akron University’s School of Business Center for Information Technology, in addition to an advisory board member for OHTec.

In 2013, George won the Crain’s Cleveland Business CIO of the Year award for his team’s work in completing a major acquisition and technology transformation at Safeguard. In 2015, George’s team was recognized by InformationWeek’s annual Elite 100 ranking of the most innovative U.S.-based users of business technology. The mobile inspection technology developed at Safeguard was selected as InformationWeek’s “One of the top 20 ideas to steal in 2015”.


General Counsel and Executive Vice President

Linda Erkkila, Esq.

Linda Erkkila is the general counsel and executive vice president for Safeguard, with oversight responsibilities for the legal, human resources, training, compliance and audit departments. Linda’s broad scope of oversight covers regulatory issues that impact Safeguard’s operations, pro-active risk mitigation, enterprise strategic planning, human capital and training initiatives, compliance and audit services, litigation and claims management, and counsel related to mergers, acquisition and joint ventures.

Linda’s oversight of the legal department along with multiple compliance and human capital focused departments assures that Safeguard’s strategic initiatives align with its resources, leverage opportunities across the company, and contemplate compliance mandates. Her practice spans almost 20 years, and Linda’s experience, both as outside and in-house counsel, covers a wide range of corporate matters, including regulatory disclosure, corporate governance compliance, risk assessment, executive compensation, litigation management, and merger and acquisition activity. Her experience at a former Fortune 500 financial institution during the subprime crisis helped develop Linda’s pro-active approach to change management during periods of heightened regulatory scrutiny.

Linda previously served as vice president and attorney for National City Corporation, as securities and corporate governance counsel for Agilysys Inc., and as an associate at Thompson Hine LLP. She earned her JD at Cleveland-Marshall College of Law. Linda holds a degree in economics from Miami University and an MBA. In 2017, Linda was named as both a “Woman of Influence” by HousingWire and as a “Leading Lady” by MReport.


Chief Financial Officer

Joe Iafigliola

Joe Iafigliola is the Chief Financial Officer for Safeguard. Joe is responsible for the Control, Quality Assurance, Business Development, Accounting & Information Security departments, and is a Managing Director of SCG Partners, a middle-market private equity fund focused on diversifying and expanding Safeguard Properties’ business model into complimentary markets.

Joe has been in a wide variety of roles in finance, supply chain management, information systems development, and sales and marketing. His career includes senior positions with McMaster-Carr Supply Company, Newell/Rubbermaid, and Procter and Gamble.

Joe has an MBA from The Weatherhead School of Management at Case Western Reserve University, is a Certified Management Accountant (CMA), and holds a bachelor’s degree from The Ohio State University’s Honors Accounting program.


AVP, Operations

Jennifer Jozity

Jennifer Jozity is the assistant vice president of operations, overseeing inspections, REO and property preservation for Safeguard. Jen ensures quality work is performed in the field and internally, to meet and exceed our clients’ expectations. Jen has demonstrated the ability to deliver consistent results in order audit and order management.  She will build upon these strengths in order to deliver this level of excellence in both REO and property preservation operations.

Jen joined Safeguard in 1997 and was promoted to director of inspections operations in 2009 and assistant vice president of inspections operations in 2012.

She graduated from Cleveland State University with a degree in business.


AVP, Finance

Jennifer Anspach

Jennifer Anspach is the assistant vice president of finance for Safeguard. She is responsible for the company’s national workforce of approximately 1,000 employees. She manages recruitment strategies, employee relations, training, personnel policies, retention, payroll and benefits programs. Additionally, Jennifer has oversight of the accounts receivable and loss functions formerly within the accounting department.

Jennifer joined the company in April 2009 as a manager of accounting and finance and a year later was promoted to director. She was named AVP of human capital in 2014. Prior to joining Safeguard, she held several management positions at OfficeMax and InkStop in both operations and finance.

Jennifer is a graduate of Youngstown State University. She was named a Crain’s Cleveland Business Archer Award finalist for HR Executive of the Year in 2017.


AVP, Application Architecture

Rick Moran

Rick Moran is the assistant vice president of application architecture for Safeguard. Rick is responsible for evolving the Safeguard IT systems. He leads the design of Safeguard’s enterprise application architecture. This includes Safeguard’s real-time integration with other systems, vendors and clients; the future upgrade roadmap for systems; and standards designed to meet availability, security, performance and goals.

Rick has been with Safeguard since 2011. During that time, he has led the system upgrades necessary to support Safeguard’s growth. In addition, Rick’s team has designed and implemented several innovative systems.

Prior to joining Safeguard, Rick was director of enterprise architecture at Revol Wireless, a privately held CDMA Wireless provider in Ohio and Indiana, and operated his own consulting firm providing services to the manufacturing, telecommunications, and energy sectors.


AVP, Technology Infrastructure and Cloud Services

Steve Machovina

Steve Machovina is the assistant vice president of technology infrastructure and cloud services for Safeguard. He is responsible for the overall management and design of Safeguard’s hybrid cloud infrastructure. He manages all technology engineering staff who support data centers, telecommunications, network, servers, storage, service monitoring, and disaster recovery.

Steve joined Safeguard in November 2013 as director of information technology operations.

Prior to joining Safeguard, Steve was vice president of information technology at Revol Wireless, a privately held wireless provider in Ohio and Indiana. He also held management positions with Northcoast PCS and Corecomm Communications, and spent nine years as a Coast Guard officer and pilot.

Steve holds a BBA in management information systems from Kent State University in Ohio and an MBA from Wayne State University in Michigan.


AVP, Business Development

Tim Rath

Tim Rath is the AVP of business development for Safeguard. He is responsible for developing innovative growth strategies for Safeguard and developing and overseeing potential partnerships, mergers and acquisitions.

Tim joined Safeguard in 2011 as project director and has filled numerous roles within Vendor Management, most recently serving as director of vendor management, a role he assumed in 2011.

Prior to Safeguard, Tim worked as director of supply chain at PartsSource Inc. in Aurora, Ohio, a provider of medical replacement parts, procurement solutions and healthcare supply chain management technology services. He also has held sales positions with Rexel, ComDoc, and Pier Associates, all based in Ohio.

Tim holds a degree in marketing and sales from The University of Akron in Akron, Ohio. He also earned his FAA Certified Commercial UAS (Drone) Pilot license in 2017.


Assistant Vice president of Application Development

Steve Goberish

Steve Goberish, is the assistant vice president of application development for Safeguard. He is responsible for the maintenance and evolution of Safeguard’s vendor systems ensuring high-availability, security and scalability while advancing the vendor products’ capabilities and enhancing the vendor experience.

Prior to joining Safeguard, Steve was a senior technical architect and development manager at First American Title Insurance, a publicly held title insurance provider based in southern California, in addition to managing and developing applications in multiple sectors from insurance to VOIP.

Steve has a bachelor’s degree from Kent State University in Ohio.