Investigation: Homeowners complain Safeguard Properties damaged their homes, trashed the belongings
Sarah Buduson, newsnet5.com
1:00 PM, Dec 11, 2013
12:11 PM, Dec 18, 2013
VALLEY VIEW, Ohio - A 5 On Your Side investigation uncovered numerous complaints about serious mistakes made by a prominent Northeast Ohio company.
Safeguard Properties is the largest property preservation company in the U.S.
Banks hire Safeguard to inspect and maintain vacant, defaulted and foreclosed homes.
5 On Your Side investigators found 68 federal lawsuits filed against Safeguard Properties.
The lawsuits were filed in 27 states, including Ohio,
In the lawsuits, homeowners allege contractors working for Safeguard Properties illegally entered their homes, damaged their property and tossed their belongings in the trash.
For example, in 2011, a Pennsylvania couple filed a lawsuit that says the company’s contractors took their daughter’s pet cat and damaged their china when they entered their home.
In 2012, a Florida woman filed a lawsuit alleging Safeguard contractors took an urn containing her mother’s remains when they removed all of the belongings from her home.
Michael Cole said he would have filed against the company, but he couldn’t afford the expense after his 2010 foreclosure.
Cole said Safeguard contractors broke in and threw out everything he had left in his home while he was still the property’s legal owner.
"They robbed us. They legally robbed us,” said Michael Cole.
The possessions that were thrown included several sentimental possessions, including a surfboard his daughters had given him as a gift and 2 dozen VHS tapes of his daughters as they were growing up.
“I could always go back to those videos and see the kids when they were little and see those times. And they're gone, Completely. I'll never see it again,” he said.
He filed a complaint with the Ohio Attorney General’s office after deciding not to sue the company.
Phil Guinaldo is still deciding whether he will sue Safeguard.
He said the company’s contractor’s damaged his property when they secured his Canton home last summer.
"They broke in it. And they not only broke in, they vandalized it,” he said.
"It's just like someone coming in this house and saying, ‘I want this house, I'm just going to take it’,” he said.
Guinaldo’s say Safeguard’s contractors wrongly assumed the house was abandoned and secured the property.
He said they shut off power to his sump pump which caused flooding in his basement.
“Basically, the whole basement has to be gutted and completely restored,” he said.
At the time contractors secured the property, Guinaldo said he had worked things out with his bank and was no longer facing foreclosure.
After seeing the company’s inspection stickers on his property, Guinaldo said he called Safeguard to let them know his home was occupied.
Illinois AG files lawsuit
After receiving more than 200 similar complaints, Illinois Attorney General Lisa Madigan filed a lawsuit against Safeguard Properties in September.
It alleges contractors "routinely deemed occupied properties . . . vacant when occupants still had the legal rights to live in them.”
Safeguard has filed a motion to have the lawsuit dismissed. The company sent us this statement about the lawsuit: “Safeguard has moved to dismiss the Illinois Attorney General’s Complaint because it is wrong on the facts and wrong on the law. Safeguard is the industry-leader in providing delinquent-property inspection and preservation services on behalf of its clients, including private mortgage servicers and lenders, and government-sponsored entities. Every day, consistent with obligations imposed both by federal guidelines and state and local laws, Safeguard vendors inspect properties delinquent on their mortgages and secure those found vacant or abandoned, thereby addressing the epidemic of blight, depressed home values, and criminal activity caused by abandoned homes from the foreclosure crisis that began in 2008 and continues to this day. In focusing on just four allegedly erroneous vacancy determinations by Safeguard vendors over the past five-and-a-half years—when the company currently performs approximately 90,000 property inspections and 7,000 preservation orders every month in Illinois alone—the lawsuit wrongly attempts to challenge Safeguard’s business practices with no factual or legal basis for doing so. Safeguard will continue to defend itself vigorously throughout the course of the litigation.” - Safeguard CEO Alan Jaffa
Alan Jaffa, CEO, and Greg Robinson, Chief Financial Officer and Executive Vice President, declined our request for an on camera interview, but agreed to speak with NewsChannel5 investigators off camera.
Jaffa told NewsChannel5 investigator Sarah Buduson Safeguard is “doing a lot of good” in communities across the country.
He said Safeguard makes a mistake “every once in a while,” but the number is small compared to the volume of work.
He said Safeguard has completed 16 million occupancy inspections and 3.2 million property preservation, grass cut and REO work orders so far this year.
The company also sent us the following statements : “Safeguard protects and maintains tens of thousands of vacant and abandoned homes in Northeast Ohio, and millions across the country, so they do not negatively impact surrounding property values, raise safety concerns, or contribute to blight in communities.”– Safeguard CEO Alan Jaffa
On the lawsuits: “We believe that the proliferations of lawsuits filed against Safeguard are a direct result of the current environment surrounding the financial services industry as a whole and the housing crisis that has decimated many communities throughout the country. Additionally, there are misunderstandings and misinterpretations as to the rights of mortgage companies to protect their collateral when a loan is in default and a property has been determined vacant. We have comprehensive policies and procedures in place with a goal of performing every work order with 100% accuracy. Our inspectors make vacancy determinations based on industry-standard criteria that comply with federal guidelines and state and local laws. This information is reviewed and verified by our internal staff. Then a separate contractor is deployed to re-verify that determination before a property is ever secured. These determinations involve judgment, so despite careful quality control procedures, human error can occasionally occur. When mistakes happen, Safeguard investigates the facts and works with the homeowner to fairly resolve the issue. Errors relative to the volumes we perform are very small.” – Safeguard CEO Alan Jaffa
Safeguard Properties is headquartered in Valley View, Ohio. The company employs 1700 workers. 1500 work in Northeast Ohio.