The Uneven Housing Recovery

Industry Update
November 2, 2015

See alsoInteractive Map: The Uneven Housing Recovery by Michela Zonta, Sarah Edelman, and Andrew Lomax

The Great Recession, which began with the collapse of U.S. home prices in 2007, resulted in an enormous number of households with negative equity. Housing prices dropped nationally by 35 percent during the collapse. As home values fell, the mortgage debt obligations of millions of American homeowners remained fixed, leading to an unprecedented number of homes being worth less money than what was owed on them.

Seven years later, about 7.5 million American homeowners are still underwater. Even though home values have continued to rise and the national percentage of homeowners with negative equity is down from 30 percent in the second quarter of 2011 to 15 percent in the first quarter of 2015, there is still much work to be done in order for the market to fully recover.

Negative equity is considered one of the principal challenges to an economic recovery at both the local and national levels.2 The persistence of negative equity imposes significant costs not only on homeowners but also on local communities and the economy at large. When homeowners owe more on their homes than what they are worth, they are unable to draw on home equity to invest in their children’s education or to start small businesses. Homeowners also may curtail their consumption by purchasing fewer goods and services from local businesses, thus curbing employment and income levels. Finally, because of underwater borrowers’ high propensity to default, large concentrations of underwater properties threaten to induce future waves of foreclosures and can contribute to a continuing cycle of decline and disinvestment.

The mortgage crisis has affected the entire nation and economy. It is important, however, to recognize that the negative equity crisis has tended to be concentrated in certain areas of the country, and its evolution has followed different patterns based on geography. This report examines the course of negative equity at the county level nationwide and provides an account of the characteristics of counties that have experienced a decrease in the incidence of negative equity compared with those where negative equity rates are stagnating or getting worse.

The following key findings are based on the analysis presented in this report:

  1. The negative equity crisis is a dynamic phenomenon, as it varies in magnitude and impact over time.
  2. Not all counties are recovering. Close to 1,000 counties across the country present either stagnating or increasing percentages of underwater homes. Among counties that are improving, many continue to experience above average rates of negative equity.
  3. Struggling counties tend to be located in nonmetropolitan and rural areas. Counties that are experiencing an increase in negative equity rates tend to be located in nonmetropolitan and rural areas, which are less likely to be equipped with the resources that could ease the recovery.
  4. Trends in negative equity are consistent with trends in other socioeconomic indicators. Changes in negative equity rates are significantly correlated with variations in household formation, job growth, and income levels.
  5. Renter affordability is a growing problem across the board. It is a growing problem for the large majority of counties as a result of the pressure on the rental market generated by the foreclosure crisis.

In light of these findings, policymakers should consider these actionable steps to help the counties that are still far from a full recovery:

  1. The Federal Housing Finance Agency, or FHFA, and the Federal Housing Administration, or FHA, should promote neighborhood stabilization efforts and foreclosure prevention.
  2. Congress should support the development of affordable rental housing programs that provide local governments with sufficient resources to help meet local rental affordability challenges.
  3. Policymakers should implement specific policy interventions for the revitalization of rural areas experiencing increases in negative equity.
  4. More negative equity data need to be made available in order to identify and monitor local markets that are economically stagnant and still present high levels of negative equity.

The negative equity crisis has improved since 2011. Millions of households, however, are still underwater, and as a result, the communities in which they live are still a long way from a full housing and economic recovery. This report illustrates the dynamic nature of the negative equity crisis and its strong ties to local economies and concludes with some policy recommendations that could help ease the impact of the negative equity crisis on not only local communities but also the economy at large.

A note on county-level data

The availability of historical data on negative equity and of other socio-economic and housing indicators at the national level allows for a comprehensive longitudinal analysis of negative equity and its correlates. The analysis focuses on multiple years, including those preceding and following the financial collapse. Most analyses so far have focused on static portraits of negative equity by concentrating on data for one specific point in time or for specific localities. As this report illustrates, the negative equity crisis has been dynamic, especially from a geographic perspective. By looking at trends over time, it is possible to understand and predict the housing and economic trajectory in counties experiencing different levels and patterns of negative equity. In addition, by utilizing counties as the unit of analysis, it is possible to better gauge the relationships between negative equity and regional economies and housing markets.

For instance, as a Washington Post article published earlier this year illustrated, Prince George’s County, Maryland, still features high rates of negative equity and serious delinquency rates that make the housing and economic recoveries of its neighborhoods seem remote. A closer look at trends over time and job market indicators, however, shows that unlike many counties with serious negative equity challenges, Prince George’s County’s economy and housing market are slowly and steadily improving. While the housing market is still fairly distressed in Prince George’s County, there are reasons to be hopeful that positive trends will continue. In particular, the county’s close proximity to Washington, D.C., should continue to provide greater access to jobs to county residents, as well as attract new residents.

As with any analysis of aggregate data, the analysis of negative equity at the county level may fail to reveal important intracounty variations. Several counties feature various promising patterns of economic and housing recovery. Yet many are characterized by substantial variations in negative equity at a more granular level, as ZIP code data suggest. Therefore, it is important to keep in mind that the analysis presented here is not intended to lead to conclusions related to areas smaller than the county.

Another potential shortcoming is related to causation. The analysis explores several correlations among real estate and business cycle indicators. Although a longitudinal analysis of these correlations may hint to possible causal relationships, this study is not intended to make inferences about causation, as more information, including historical data on foreclosures and delinquencies and on local regulatory environments, would be needed to explore statistically any causal relationship between negative equity and housing and economic recovery.

An example of intracountry variation

Although negative equity tends to be concentrated in particular counties, the distribution of negative equity by ZIP code reveals important variations within counties that are not captured by aggregate data. For instance, although the negative equity of Contra Costa County, California, is 9.8 percent in 2015 and has declined from 38.6 percent in 2011, there are considerable variations in the incidence of underwater homes in the county across ZIP code areas. For instance, the ZIP codes located in the northwestern part of the county still present high negative equity rates. These include Richmond, California, where the negative equity rate in the first quarter of 2015 was 16.2 percent.

Michela Zonta is a Senior Policy Analyst for the Housing Policy team at the Center for American Progress. Sarah Edelman is the Director of Housing Policy at the Center.

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Source: Center for American Progress

Additional Resource:
The Uneven Housing Recovery (full report)



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.