Wisconsin Supreme Court Tackles “Walkaway” Foreclosures

Updated 4/27/17: Reinhart Boerner Van Deuren S.C. Attorneys at Law released an article titled The Timing of the Foreclosure Sale Process for Occupied Properties in Wisconsin.

Link to article

Updated 4/25/16: Wisconsin AB 720 has been signed by Governor Scott Walker.

Link to Enrolled Legislation text

Additional Resources:
Milwaukee Journal-Sentinel (Scott Walker sings bills on ‘zombie homes,’ photo IDs, drunken driving)

WISN ABC 12 (Mayor Barrett rails against Gov. Walker, ‘Zombie Houses’)

Updated 3/5/16: The Milwaukee Journal-Sentinel published an article titled Senate may take up zombie homes bill.

Link to article

Updated 1/22/16: The Milwuakee Journal-Sentinel published an article titled GOP bill would create more ‘zombie’ homes, Milwaukee officials say.

Link to article

Link to WI AB 720 text

Updated 11/4/15: The October issue of the Wisconsin Lawyer (State Bar of Wisconsin) featured an article titled Foreclosures in Limbo: Zombie Properties.

Link to article

Updated 3/20/15: The National Law Review posted an article titled Zombie Properties May Haunt Lenders in Wisconsin Foreclosures.

Link to article

Legislation Update
February 17, 2015

Circuit courts must order mortgagee banks to sell foreclosed and abandoned property, known as “walkaway” foreclosures, within a reasonable time after obtaining a foreclosure judgment, the Wisconsin Supreme Court has ruled.

Shirley Carson obtained home mortgage loan for $52,000 but subsequently defaulted. The Bank of New York Mellon, as loan trustee, sought a judgment of foreclosure and sale of the premises, waiving its right to a deficiency judgment against Carson. But the bank could not locate Carson to serve the complaint, and served by publication.

The process server said Carson’s house in Milwaukee appeared to be abandoned. The mortgage loan servicer filed a “registration of abandoned property in foreclosure” and the bank obtained a default judgment determining that Carson owed the bank more than $81,000. The circuit court ordered the property to be sold at any time after expiration of the three-month redemption period during which Carson could redeem the property.

The order prohibited the bank and Carson from committing waste on the property, and said the bank could take steps to secure the property if it was abandoned. However, the circuit court did not definitively rule that the house was an abandoned property.

The bank did not secure the property and it was burglarized, vandalized, and became subject to fines and building code violations. Carson incurred $1,800 for failing to maintain the property, and the bank did not maintain it despite an order from the city.

More than 16 months after the foreclosure judgment was entered, the property still wasn’t sold, and it wasn’t up for sale. The bank said it elected not to bring a sale because it wasn’t fit for selling. Carson remained owner with legal right to possession.

Carson, who could not maintain the property or pay the fines, filed a motion to find the property abandoned, and sought an order that the bank sell the vacant property.

Carson filed the motion under Wis. Stat. section 846.102, which says the sale of abandoned property “shall be made upon the expiration of 5 weeks from the date when such [foreclosure] judgment is entered.”But the circuit court denied the motion, concluding that circuit courts don’t have authority to compel a sale of abandoned property under the statute. Carson appealed, and the appeals court reversed.

In Bank of New York Mellon v. Carson, 2015 WI 2015 (Feb. 17, 2015), a four-justice majority ruled that section 846.102 authorizes circuit courts to order mortgagee banks to sell abandoned foreclosures, and must order sales within a reasonable time.

“The plain language of the statute grants the circuit court the authority to order a bank to sell the property,” wrote Justice Ann Bradley wrote in a majority opinion. “Indeed, under the statute the court’s judgment must include a requirement that the property be sold.”

The majority noted that mortgagee banks can delay sales on other types of foreclosure properties, but state law treats abandoned property differently.

In addition, the majority ruled that mortgagee’s “must” sell, despite the bank’s argument that it must wait five weeks to sell but has a five-year window to sell after that.

The bank had argued that like other foreclosure statutes, section 846.102 merely creates a delay mechanism to give homeowners one last chance to redeem.

“Wisconsin Stat. § 846.102 addresses properties that have been abandoned, properties which borrowers no longer have an interest in retaining,” Justice Bradley wrote. “Thus, the policy concern of creating a delay does not appear to be implicated.”

The intent of the statute is to help municipalities deal with abandoned properties promptly, the majority explained, since abandoned properties attract crime.

“Interpreting Wis. Stat § 846.102 as permitting sale at any time within five years after judgment is entered would exacerbate the problem that the statute was meant to ameliorate,” wrote Bradley, noting studies on the negative impact of vacant property.

The majority remanded the case for a determination on abandonment, and an order of sale within a reasonable time after the five-week period. What constitutes a “reasonable time” should be based on the totality of the circumstances, the court noted.


Justice David Prosser wrote a concurring opinion, joined by Justices Annette Ziegler and Michael Gableman. The concurring justices would affirm the lower appeals court decision, agreeing that Carson could seek judicial sale of the abandoned property.

But they disagreed that section 846.102 requires circuit courts to order the prompt sale of abandoned properties, stating the majority’s mistaken interpretation “is likely to have profound ramifications on real estate financing in Wisconsin.”

Justice Prosser noted that mortgagee banks normally have incentives to promptly sell foreclosed property, since they normally recoup debts upon the sale. Thus, mortgagee banks would only delay sales if there’s a rational economic reason to do so.

“[I]f the mortgagee is expected to assume responsibility for abandoned property, the mortgagee must be given reasonable options, even if unpalatable, rather than be forced into unwanted sale without the protection of the equitable principles upon which mortgage foreclosures rest,” Justice Prosser wrote.

Justice Prosser said banks with less flexibility to determine the timing of abandoned home sales might increase financing costs or deny certain mortgage loans. He said the majority’s decision may require prompt sale of thousands of abandoned properties.

Source: State Bar of Wisconsin

Additional Resource:

Milwaukee Journal Sentinel ( Milwaukee officials hail court ruling on ‘zombie’ properties)



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.