Tough Choices for Servicers After Tenant Foreclosure Law Expires

On February 5, National Mortgage News published an article discussing potential issues facing mortgage servicers after the expiration of the federal Protecting of Tenants at Foreclosure Act at the end of 2014.

Tough Choices for Servicers After Tenant Foreclosure Law Expires

Mortgage servicers are bracing for a potential public relations nightmare: scores of renters and their belongings on curbs across America, after evictions from foreclosed properties.

Consumer advocates expect a rash of evictions in the coming months on properties entering foreclosure following the expiration of the federal Protecting Tenants at Foreclosure Act.

That 2009 law upheld existing leases and required that tenants in foreclosed properties be given 90 days’ notice before being evicted. It was originally set to expire at the end of 2012, but a provision of the Dodd-Frank Act extended the law until the end of 2014.

Wells Fargo, the nation’s largest mortgage servicer, said it is no longer following the guidelines prescribed by the federal law, while JPMorgan Chase, Citigroup and Nationstar are voluntarily following its rules. Bank of America said it is in the process of reviewing its policy.

With the law’s expiration, mortgage servicers will have to maneuver a patchwork of state and local regulations. Just nine states and Washington, D.C., currently offer the same protections as the expired federal law, while 17 states have no specific tenant protections or allow servicers to evict immediately following a foreclosure sale.

“I expect to see more evictions in the coming months,” said Kent Qian, a staff attorney at the National Housing Law Project in San Francisco. “Some renters are going to be left out in the cold.”

Roughly 30% to 40% of properties in foreclosure have tenants or renters, said Linda Couch, a senior vice president for policy and research at the National Low Income Housing Coalition.

“One of the reasons Congress decided to act in the first place is that foreclosure affects a large number of renters,” said Couch.

Bills to make the law permanent failed last year. Now that Republicans control both houses of Congress, making the law permanent “is not in the cards,” Couch said. But consumer advocates are still looking for some housing policy legislation that might reenact the law.

Banks are servicers on many foreclosed properties, which may be held on their own books or serviced on behalf of investors in securitizations. In the past, when a property became real estate-owned following a foreclosure, the tenant lost his deposit and no longer had the right to occupy the home unless the new owner offered him a new lease. Mortgage servicers typically do not want to be landlords, so most tenants were required to move.

Evictions may be in the financial interest of investors when tenants fail to pay rent. Often when a home goes into foreclosure, the existing tenant does not know who to send the rent to and simply stops paying.

But a flood of evictions could play poorly with a public already angry at mortgage servicers.

“Any bank that is going to continue with the same criteria that the government imposed (with the federal law) is doing so to reduce the reputational risk, that’s all,” said Cary Sternberg, a default servicing expert.

“On the other side, these banks and servicers represent trusts and investors, and now they are going to expose themselves to financial risk if investors come back to them saying, any time you give a tenant three months’ notice, they could be losing money,” he added.

Mortgage servicers that do not voluntarily adhere to the federal law’s requirements have gauged that the financial risk they face from investors is greater than the potential reputational risk from tenants, Sternberg said.

To be fair, many servicers, including Wells Fargo, offer relocation assistance to tenants in foreclosed properties. And both Fannie Mae and Freddie Mac will continue to follow the law for their respective REO inventories. The Federal Housing Administration typically requires that properties be vacant when they are turned over to the agency after a foreclosure.

So far, consumer advocates have not seen much fallout yet because properties with foreclosure sales dates in December are still covered by the federal law.

Though home prices have rebounded significantly from the depths of the 2008 financial crisis, there are still millions of distressed properties languishing in some state of the foreclosure process — or heading there — affecting many, many tenants.

There were 820,000 properties stuck somewhere in the foreclosure process in December that had not yet been liquidated through a foreclosure auction or by a bank taking legal title to the property, according to Black Knight Financial Services.

Servicers have long complained that laws like the Protecting Tenants at Foreclosure Act delay a REO property’s sale after an already lengthy foreclosure process. It now takes an average of 1,010 days — or nearly three years — for a delinquent loan to move through foreclosure, according to Black Knight.

In many states, a foreclosure terminates the rights of a tenant. So without the federal law, a mortgage servicer or purchaser of an REO property does not have to file a separate eviction notice to remove a tenant.

“In traditional foreclosure states, you get the right of possession when the foreclosure is completed so the owner would just get a sheriff to go to the property,” to evict the tenant, said Qian.

In non-judicial foreclosure states, where foreclosures are not processed by a court, an owner would have to file a separate eviction notice, he said.

There is confusion because some state laws provide tenants with the notice of the foreclosure itself, while others require a notice period after a foreclosure, but before an eviction can proceed.

A few states including Massachusetts, New Jersey and Rhode Island have “just cause” laws, where a foreclosure is not considered a valid reason to evict a tenant.

Jeremy Bergstrom, a senior staff attorney at the Sargent Shriver National Center on Poverty Law, said bank servicers still might adhere to the federal law because of the added expense of complying with the hodge-podge of state laws.

“These tenants are truly the innocent victims of foreclosure because they didn’t fall behind on the mortgage, and are current on their rent and could be evicted through no fault of their own,” Bergstrom said.

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About Safeguard 
Safeguard Properties is the mortgage field services industry leader, preserving vacant and foreclosed properties across the U.S., Puerto Rico, Virgin Islands and Guam. Founded in 1990 by Robert Klein and headquartered in Cleveland, Ohio, Safeguard provides the highest quality service to our clients by leveraging innovative technologies and proactively developing industry best practices and quality control procedures. Consistent with Safeguard’s values and mission, we are an active supporter of hundreds of charitable efforts across the country. Annually, Safeguard gives back to communities in partnership with our employees, vendors and clients. We also are dedicated to working with community leaders and officials to eliminate blight and stabilize neighborhoods. Safeguard is dedicated to preserving today and protecting tomorrow.  Website:



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.