Steve Meyer Discusses the Silent Hazard at Abandoned Properties

The April issue of Servicing Management featured an article authored by Steve Meyer, Safeguard’s AVP of high risk and hazard claims, titled The Silent Hazard At Abandoned Properties.

The Silent Hazard At Abandoned Properties
How field services companies identify and remediate damage caused by “meth labs.”

The AMC television show “Breaking Bad” brought to light an increasing problem in the U.S. Although fictional, the show featured a story line that is all too familiar in today’s world. The main character, Walter White, is faced with stage III lung cancer and has to figure out a way to support his wife and teenage son, who has cerebral palsy. He decides to use his background as a chemistry teacher to partner with an ex-student and begin manufacturing the illegal drug crystal meth, or methamphetamine.

The television show had a popular run from 2008 to 2013. It opened people’s eyes to
another world where desperate people sometimes take desperate measures to
ensure a stable life. But it also begs the question of how many Americans are like
Walter White – with only one medical diagnosis, unemployment or other catastrophic
event away from taking extreme measures to keep their lives and their families afloat.
And for those like Walter, when they do turn to those extreme measures like
manufacturing crystal meth in their homes, what damage or hazards do they leave
behind? Field services companies see first-hand the damage of crystal meth
manufacturing in properties in many neighborhoods across the country.

An increasing problem
The mortgage servicing industry has seen an increase in the past five to six years of abandoned and foreclosed homes that once housed meth laboratories, or “meth labs.” In fact, the number of properties we have reported as being contaminated from crystal meth has increased approximately 30% over the past two to three years.

The challenge is that it is difficult to identify an abandoned or vacant property that was once used to manufacture meth. It can happen in any neighborhood, town or city in the country. Whether it be the previous homeowners trying any means to keep their home – and taking desperate measures as Walter White did – or squatters entering a vacant property and manufacturing the hazardous drug, field services companies must keep their inspector and contractor networks safe, protect the integrity of the property for their mortgage servicing clients, and follow state regulations when remediating the damage.

Identifying a former meth lab
Crystal meth is a restricted or illegal drug that is colorless and odorless. According
to Medical News Today, the substance is abused because it has a long-lasting euphoric
effect on the user. There are hundreds of “recipes” on how to produce the drug, but it
can be as simple as using an over-the-counter medication containing
pseudoephedrine, household chemicals and a plastic bottle.

A meth lab is an illicit operation that contains the supplies and chemicals used to
produce the drug. They are increasingly prevalent throughout the U.S., according to
the National Drug Intelligence Center (NDIC), a component of the U.S. Department
of Justice. In 2012, the U.S. Drug Enforcement Administration (DEA) reported that
more than 11,200 labs were seized in 49 states.

A large number of properties that house meth labs end up in foreclosure – and that
number continues to increase in neighborhoods across the country. In the past six
months, our contractors cleaned up approximately 925 properties that had been
contaminated with the chemicals found in crystal meth. Of those properties, roughly
218 were bank owned (REO) or post-foreclosure sale, while 707 were not REO.

Field service inspectors and contractors have to be educated on identifying vacant or abandoned properties that were used as meth labs. Some of the common signs given by the NDIC and the DEA include the following:

  • Unusual odors such as rotten eggs, cat urine, nail polish remover, and ammonia
    or the other chemicals used to make crystal meth;
  • Unusually large amounts of cold medicine containing ephedrine or pseudoephedrine;
  • Jars containing a clear liquid with white or red residue on the bottom;
  • Glass cookware or frying pans with a powdery residue;
  • Propane tanks with blue fittings;
  • Metallic ribbon stored in oil or kerosene;
  • Excessive amounts of debris or trash, especially chemical containers, coffee
    filters or pieces of cloth that are stained red, and duct tape rolls;
  • Windows covered with aluminum foil or blackened in some way;
  • Evidence of chemical waste or dumping; and
  • Extensive security measures such as “No Trespassing” signs or fences.

Once a vacant or abandoned home has been determined to be a former meth lab by
either the field services vendor, or often by law enforcement, servicers will be alerted,
and the appropriate measures can be taken to reduce damages and potential hazards.

Hazards of meth labs
Field services companies must be sure their contractors are taking precautions when
entering any vacant home that has the potential for having been contaminated by the 
manufacture of crystal meth. The NDIC reports that the greatest risks are the
exposure to hazardous chemicals and the potential for fire or explosion due to the
volatility of the chemicals. Chemicals in the process – like Freon, ammonia, lithium
metal, hydriodic acid and iodine crystals – can cause severe respiratory problems if
inhaled. More specifically, exposure to these chemicals can cause dizziness, nausea,
disorientation, a lack of coordination, excess fluid in the lungs, severe chemical burns
and damage to internal organs.

Other chemicals, such as acetone, red phosphorus and hypophosphorous acid, are
extremely flammable and can cause an explosion at the property, posing a risk to
people and homes in close proximity.

The best way to remediate the damage caused by meth labs is for field services
companies to employ specially licensed or credentialed contractors as required by
each state.

State laws and regulations
When field services companies are dealing with a property contaminated by the presence of a meth lab, there are no national standards or guidelines on how to access and clean up the potential hazards; however, the U.S. Environmental Protection Agency (EPA) released voluntary guidelines in 2007 based on the best-available scientific
knowledge. The EPA’s recommended guidelines include the following:

  • Secure the property to prevent unauthorized entry;
  • Hire a contractor to conduct remediation, sampling and air monitoring;
  • Ventilate the property;
  • Perform preliminary assessment and sampling;
  • Remove contaminated materials;
  • Vacuum hard surfaces, including walls and floors;
  • Wash the walls;
  • Clean and seal the heating, ventilation and air-conditioning system; and
  • Conduct post-remediation sampling.

Additionally, 25 states have established their own regulations for remediating meth labs
and have their own set of licensing requirements. For example, Washington has a strict
program requiring that contractors complete an application form, take the 40-hour
training class and enroll in a two-day licensing course. This must be renewed every two
years.

Indiana requires that inspectors receive a special qualification by accumulating
40 hours of experience cleaning illegal drug labs, receive eight hours of training for
supervisors, pass an exam on illegal drug cleanup with a score of 80% or better
and maintain applicable insurance – professional liability and errors and omissions
in the amount of $1 million, and pollution prevention in the amount of $3 million.

To keep up with these unique requirements, field services companies including ours
have a dedicated internal office staff and network of licensed contractors who are
familiar with each of the states’ laws.

Remediating a meth lab
When it is determined that a vacant property once housed a meth lab, a field services
company will typically flag the property or loan to ensure that no one enters the
property unless he or she is completing the remediation and is properly licensed. Then
those licensed contractors perform a pre-assessment by testing to determine the level
of contamination. Samples are taken of housing materials and the air quality within the
property.

Most states have determined “safe” levels of meth residuals. For example, California
and Ohio established 1.5 micrograms per 100 square centimeters as the health-based
remediation standard. It can vary greatly in other states.

Once testing is complete, licensed contractors create a plan for remediation. They must
wear protective equipment depending on the level of contamination. This often includes
a respirator; a chemical-protective suit; gloves; and chemical-resistant, steel-toe boots,
according to the Occupational Safety and Health Administration.

Cleanup usually consists of a triplewash/triple-rinse process. Testing and sampling is
done after each wash until the contamination levels are within the acceptable standards
established by the state where the property is located. Cleaning products such as
Crystal Clean and Simple Green are what our contractors prefer to use during
remediation. It is rare that the company’s contractors have to tear out building materials
or recommend demolition, but it can happen.

Typical costs for assessment and remediation of a meth lab at a vacant property can
vary between $2,500 and $30,000 depending on the level of contamination. Our costs
have averaged between $10,000 and $20,000 per property. These costs may be
covered by insurance.

Conclusion
The show “Breaking Bad” highlighted the growing issue of meth labs that mortgage
servicers and field services companies face every day. Inspectors and contractors
working for field services companies can be subjected to serious health and other
hazards when they discover a meth lab at a vacant property. And it can happen
anywhere.

It is important that field services companies protect not only the properties they service
for their clients, but the boots-on-the-ground vendors performing the work.

By following requirements established by state governments, these companies can
clean up the mess left behind by the Walter Whites of the world.

Steve Meyer is assistant vice president of high risk and hazard claims at Safeguard
Properties. He can be reached at steve.meyer@safeguardproperties.com.
 
Please click here to view the article as a PDF.

About Safeguard 
Safeguard Properties is the largest mortgage field services company in the U.S. Founded in 1990 by Robert Klein and based in Valley View, Ohio, the company inspects and maintains defaulted and foreclosed properties for mortgage servicers, lenders, and other financial institutions. Safeguard employs approximately 1,700 people, in addition to a network of thousands of contractors nationally. Website: www.safeguardproperties.com.

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CHIEF EXECUTIVE OFFICER

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.

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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.

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CHEIF INFORMATION OFFICER

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”.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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AVP, Mobile and Analytics

Jason Heckman

Jason Heckman is the assistant vice president of mobile and analytics for Safeguard. He is responsible for both Safeguard’s mobile development and strategy as well as the company’s data warehousing and business intelligence. Jason oversees the design, development and release of all Safeguard’s internally developed mobile applications. He also oversees the development and delivery of operational and analytical data technologies throughout the organization.

Jason joined Safeguard as manager of mobile in 2012. During that time he led the development and integration of Safeguard’s mobile applications across the company’s vendor network to provide real-time data from the field. In 2014, he was promoted to director of mobile applications and named assistant vice president in 2017.

Prior to joining Safeguard, Jason was the director of application development and business intelligence for Revol Wireless, a privately held wireless provider in Ohio and Indiana.

Jason holds a bachelor’s degree in business management from Case Western Reserve University in Ohio.

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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.