San Diego Union Tribune “Chula Vista forces lenders to maintain foreclosures”

A recent article in the San Diego Union Tribune talks about recent changes in Chula Vista’s property ordinances.

Chula Vista forces lenders to maintain foreclosures

By Emmet Pierce

October 12, 2008

Some lenders think there must have been a mistake when they see the hefty fines they have received for violating Chula Vista’s blight-prevention ordinance for foreclosed homes.

“I had one lender call and say, ‘I got a $13,000 bill and I want to know what you did for $13,000,’ ” said Doug Leeper, the city’s code-enforcement manager. “I said, ‘I didn’t do anything. We’re not property managers. We fined you because you didn’t do anything.’ ”

Over the past year, the ordinance written by Leeper has become a national model for communities overwhelmed by spikes in foreclosures, analysts say. Hit hard by the mortgage market meltdown, Chula Vista has taken a strong stance against lenders and loan servicers who allow abandoned houses to become neighborhood eyesores.

Under regulations enacted last October, the city makes lenders responsible for upkeep as soon as a notice of mortgage default has been filed on a vacant dwelling, even if ownership of the home hasn’t formally been returned to the lender.

The city is able to do so because the lender retains the right and responsibility to secure and repair vacant properties, Leeper said.

“That is the cutting-edge part of our ordinance,” he said.

Lenders have registered about 1,100 vacant homes in loan default or foreclosure with the city. Failure to comply with the blight ordinance can result in fines of up to $1,000 per day.

So far, the city has levied $850,000 in fines and penalties and collected a little more than $200,000. In addition, Chula Vista has brought in about $77,000 through vacant-home registration fees imposed by the ordinance. Uncollected fines become liens against foreclosed properties, payable at resale.

Notices of default launch the foreclosure process. Traditionally, lenders wait several months after a notice is filed before they take on maintenance responsibilities for vacant homes, Leeper said.

That lag often forces cities to address blight issues on their own, removing tall weeds, draining dirty swimming pools and securing open structures. Typically they seek reimbursement later, but Chula Vista has used its blight ordinance to shift that burden back to lenders.

“Lenders will respond when it costs them less to maintain the property than to ignore local agency requirements,” said Jolie Houston, a San Jose land-use attorney who has studied the issue for the California League of Cities.

Ordinances that address blight are common, but typically they don’t target lenders so directly, said Jim Brooks, director of the Community and Economic Development Committee for the National League of Cities.

Some critics say Chula Vista is playing rough with an industry that already is struggling to cope with billions of dollars in losses from failing subprime loans.

“That kind of measure will add additional costs to banks that have been hit really hard already and ultimately the cost will be transferred down to consumers and investors,” said Marc Carpenter, a San Diego real estate agent who specializes in foreclosures.

Such criticism hasn’t stopped other communities from following Chula Vista’s example. Leeper said more than 300 jurisdictions nationwide have contacted him to learn more about the ordinance over the past year. Although most are in California, inquiries have come from such distant cities as Boston, Milwaukee and Dallas.

“This is where a lot of cities are starting, with a Chula Vista-type ordinance,” Houston said. “The more vacant foreclosed homes you have, the more city council members feel compelled to do something. They can’t fix the lending problem, but they can try to prevent neighborhoods from becoming blighted.”

So far, no cities that have adopted such measures have been successfully challenged in court, Houston said. Stockton, which had the nation’s highest foreclosure rate in August, has modeled its anti-blight measure after Chula Vista’s. Coral Springs, a community in south Florida, recently did the same. Closer to home, Santee, Riverside County and Murrieta have followed the Chula Vista blueprint, tailoring it to their needs.

Wednesday, Escondido City Council members voted to tighten property-maintenance regulations to hold lenders more accountable.

Like Chula Vista, Los Angeles and San Jose require registration of abandoned homes, but only after code violations are reported, Leeper said. San Diego also tracks abandoned, foreclosed homes, said Tony Khalil, senior code-enforcement engineer. The program is less aggressive than Chula Vista’s.

“We don’t focus on trying to penalize or collect fines,” Khalil said. “We focus on returning homes to productive use.”

San Diego County, which oversees unincorporated areas, hasn’t experienced the same level of foreclosures as urban areas, but it’s examining Chula Vista’s measure to determine whether any of its elements would be useful, said Pam Elias, division chief of county code enforcement.

Although approaches to the blight problem vary, American cities have been forced to pay close attention to vacant homes as the mortgage meltdown has progressed. Some community activists have described concentrations of abandoned homes as “dead zones” that attract vandals and drain the vitality from neighborhoods.

One of the biggest challenges that cities face in dealing with such homes is determining who is legally responsible for them. That’s because lending institutions typically don’t hold onto loans. They are quickly sold to generate income to finance additional mortgages.

“We get this house,” Leeper said. “We pull the title documents. We say, ‘Look, it’s ABC Mortgage.’ We call them and they say, ‘Are you kidding, we sold that loan two months ago.’ ”

In that case, Leeper and his staff return to the title documents and send out notices to everyone whose name and address is listed. Sometimes the only way to find out who holds the mortgage on a home is to place a lien against the property. That way, the dwelling can’t be sold until the lien is paid.

During the recent housing boom, billions of dollars in home loans nationwide were bundled into securities and sold to Wall Street investors. When mortgage-backed securities were in demand, lenders lowered underwriting standards to keep home buyers in the market after real estate prices soared.

“We had people buying more house than they could afford with creative financing they didn’t understand,” Leeper said.

Within San Diego County, there were 1,979 foreclosures in August, a 1 percent decline from July, but a rise of nearly 140 percent over the previous year. The 91913 eastern Chula Vista ZIP code led the county in notices of default, with 106 filings. That area’s 94 foreclosures represented a 154 percent increase over the August 2007 figure.

Robert Klein, chief executive officer of Safeguard, a property-management firm that represents lenders nationwide, said he understands why cities are concerned about blight. Even so, Klein complains that the adoption of Chula Vista-style ordinances is complicating the lives of lenders and property managers, who now must adapt to different sets of rules.

“Every day we discover a new ordinance coming out somewhere,” Klein said.

Having to work with “a patchwork of local ordinances” will drive up the costs of lending, said Dustin Hobbs, spokesman for the California Association of Mortgage Bankers.

Hobbs said there is no need for California cities to adopt ordinances because they already have the authority to levy fines for housing blight under recently approved Senate Bill 1137.

Houston countered that unlike Chula Vista’s measure, the bill does nothing to require lenders to speed up the maintenance process.

Allan Mallach, a senior fellow with the Brookings Institution, said the Chula Vista measure is an important tool for cities fighting blight.

“This issue of holding lenders or creditors responsible from the point when the foreclosure begins rather than after they take title is tremendously important,” Mallach said.



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.



Sean Reddington

Sean Reddington is the new Chief Information Officer for Safeguard Properties LLC. Sean has over 15+ years of experience in Information Services Management with a strong focus on Product and Application Management. Sean is responsible for Safeguard’s technological direction, including planning, implementation and maintaining all operational systems

Sean has a proven record of accomplishment for increasing operational efficiencies, improving customer service levels, and implementing and maintaining IT initiatives to support successful business processes.  He has provided the vision and dedicated leadership for key technologies for Fortune 100 companies, and nationally recognized consulting firms including enterprise system architecture, security, desktop and database management systems. Sean possesses strong functional and system knowledge of information security, systems and software, contracts management, budgeting, human resources and legal and related regulatory compliance.

Sean joined Safeguard Properties LLC from RenPSG Inc. which is a nationally leading Philintropic Software Platform in the Fintech space. He oversaw the organization’s technological direction including planning, implementing and maintaining the best practices that align with all corporate functions. He also provided day-to-day technology operations, enterprise security, information risk and vulnerability management, audit and compliance, security awareness and training.

Prior to RenPSG, Sean worked for DMI Consulting as a Client Success Director where he guided the delivery in a multibillion-dollar Fortune 500 enterprise client account. He was responsible for all project deliveries in terms of quality, budget and timeliness and led the team to coordinate development and definition of project scope and limitations. Sean also worked for KPMG Consulting in their Microsoft Practice and Technicolor’s Ebusiness Division where he had responsibility for application development, maintenance, and support.

Sean is a graduate of Rutgers University with a Bachelor of Arts and received his Masters in International Business from Central Michigan University. He was also a commissioned officer in the United States Air Force prior to his career in the business world.


General Counsel and Executive Vice President

Linda Erkkila, Esq.

Linda Erkkila is the general counsel and executive vice president for Safeguard and oversees the legal, human resources, training, and compliance departments. Linda’s responsibilities cover regulatory issues that impact Safeguard’s operations, risk mitigation, enterprise strategic planning, human resources and training initiatives, compliance, litigation and claims management, and mergers, acquisition and joint ventures.

Linda assures that Safeguard’s strategic initiatives align with its resources, leverage opportunities across the company, and contemplate compliance mandates. Her practice spans over 20 years, and Linda’s experience covers 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, High Risk and Investor Compliance

Steve Meyer

Steve Meyer is the assistant vice president of high risk and investor compliance for Safeguard. In this role, Steve is responsible for managing our clients’ conveyance processes, Safeguard’s investor compliance team and developing our working relationships with cities and municipalities around the country. He also works directly with our clients in our many outreach efforts and he represents Safeguard at a number of industry conferences each year.

Steve joined Safeguard in 1998 as manager over the hazard claims team. He was instrumental in the development and creation of policies, procedures and operating protocol. Under Steve’s leadership, the department became one of the largest within Safeguard. In 2002, he assumed responsibility for the newly-formed high risk department, once again building its success. Steve was promoted to director over these two areas in 2007, and he was promoted to assistant vice president in 2012.

Prior to joining Safeguard, Steve spent 10 years within the insurance industry, holding a number of positions including multi-line property adjuster, branch claims supervisor, and multi-line and subrogation/litigation supervisor. Steve is a graduate of Grove City College.


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.


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.