Wall Street Journal “Vacant-Property Fees Add to Mortgage Firms’ Woes”

Robert Klein was quoted in a Wall Street Journal article regarding vacant property fees imposed by local governments.

Vacant-Property Fees Add to Mortgage Firms’ Woes


As home foreclosures continue to rise, a growing number of local governments are imposing stiff fees on mortgage companies responsible for the vacant properties.

Local officials say the levies are intended to offset the cost of maintaining and policing abandoned homes and to keep these properties from becoming blights on neighborhoods. The tougher rules also are adding to the financial burden on mortgage companies grappling with a surge in foreclosures, which some economists estimate may reach three million by the end of this year. And the new rules may raise costs and lower returns for investors who hold bonds backed by pools of mortgages.

“These ordinances are popping up every single day,” said Robert Klein, chief executive of Safeguard Properties in Brooklyn Heights, Ohio, which maintains vacant homes for mortgage companies nationwide. Mr. Klein said his office is tracking more than 60 local ordinances that deal with foreclosed properties. Local governments taking a tougher stand span the country, from Providence, R.I.; to Cincinnati, Ohio; to Chula Vista, Calif.

Keeping up with so many different regulations and changes is a challenge for the mortgage industry, said Chad Neel, president of FIS Field Services Inc., a Lender Processing Services Inc. unit that helps lenders manage defaults and foreclosures. In some cases, he added, “they force you to maintain the property at a standard that’s higher than the one for homeowners.”

The Mortgage Bankers Association says that mortgage companies are committed to maintaining vacant properties.

City officials complain that local taxpayers can’t continue to pick up the cost of cutting lawns, draining swimming pools, boarding up windows and policing vacant properties. In October alone, Louisville, Ky., spent $106,000 maintaining properties owned by major lenders, said Mayor Jerry Abramson, who has been talking to banks about reimbursement for property maintenance. “The cities are shouldered with the financial cost when they receive a complaint from a neighbor,” Mr. Abramson said.

Some municipalities are responding to the challenge by doubling or tripling existing fees and stepping up enforcement of existing ordinances, while others are adding fees and penalties. Registration fees on vacant or foreclosed properties can range from $35 to $500, said Diane Pendley, a managing director at ratings firm Fitch Inc., with annual fees sometimes topping $700 and penalties as high as $1,000 a day.

In June, California Gov. Arnold Schwarzenegger signed a bill that lets local governments in the state impose a $1,000-a-day fine on financial institutions that fail to maintain vacant properties if problems aren’t fixed within 14 days. The new law allows cities “to go in, abate the problem and tack [the cost] on to the tax bill” without having to enact a local ordinance, said California state Sen. Don Perata, the bill’s sponsor.

Chula Vista, Calif., went a step further last fall by requiring that mortgage companies register and take responsibility for vacant homes even if a property hasn’t yet been the subject of a foreclosure action. The program is designed to keep vacant homes from falling into “a black hole” between delinquency and foreclosure, said Chula Vista’s code-enforcement manager, Doug Leeper, who drafted the measure.

Under the program, property owners can face fines as high as $1,000 a day if a vacant home is improperly maintained; unpaid levies are tacked on to the lender’s property-tax bill. Chula Vista already has imposed $296,000 in fines and penalties, Mr. Leeper said. He said he has fielded inquiries about the program from about 250 communities in Arizona, California, Colorado Florida, Illinois, Missouri, Oregon and Tennessee.

Providence, R.I., recently enacted a “vacant property penalty” that lets the city impose a fine equal to 10% of assessed value if a vacant property remains unoccupied and becomes a blight on the neighborhood. “We have inspectors out there now inspecting every neighborhood in the city and identifying every property,” said Providence’s planning director, Thomas E. Deller, adding that his department already has inspected more than 950 vacant properties.

Other municipalities are beefing up existing statutes. While Cincinnati has had a vacant-property ordinance for more than a decade, in 2006 it increased the application fees for vacant properties to as much as $3,500 a year after five years from a flat $300. This year, the city began obtaining civil judgments against property owners who don’t pay their fees. It also is putting together a program that will let the city repair, demolish or barricade abandoned homes and then, to recover the cost, put a tax lien on the property. City officials say they have collected about $192,000 in fees so far this year compared with roughly $265,000 in all of 2007.

Many of the vacant properties “are owned by lenders, and we are having a difficult time of getting them to step up to the plate,” said Edward Cunningham, Cincinnati’s division manager for property maintenance and code enforcement, adding that the money collected by the city goes into a fund used to deal with vacant buildings.

The registration programs are also designed to make it easier for cities to determine whom they should contact if the neighbors start to complain.

“The idea is to get some responsibility so these buildings don’t sit there and have a negative impact on the community while people argue about who is responsible,” said William Good, commissioner of inspectional services for Boston, which recently began requiring that properties be registered with the city as soon as a foreclosure notice is issued. To increase accountability, Boston is requiring that owners of vacant properties hire a local property manager to be responsible for inspecting the property monthly and maintaining it.



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.