I have been blessed many times in my life, and in many different aspects. One area I do not take for granted was the opportunity to witness first-hand how my late father-in-law, an Ernst & Young Entrepreneur of the Year Award winner, built his business, Safeguard Properties, into the largest mortgage field service company in the nation. He employed very effective, non-traditional methods.
Many tried to emulate my late father-in-law but never enjoyed the same success. So, what was the “secret sauce”? I will not disclose all of his secrets that I have incorporated into MuniReg, but I will share one key secret – do the right thing, even if it may take away revenue opportunities.
I witnessed a discussion he had with HUD officials when he was advocating for pre-approval to board all broken windows, regardless of location. At that time there were only a handful of “pre-approved boarding areas” in specific cities. He encouraged HUD officials to adopt the policy to avoid repeated vandalism and numerous window replacement costs while properties sat vacant during the lengthy foreclosure process, despite his company profiting each time a window was re-vandalized. Why? Because it was the right thing to do for the community at that time.
He was the fiercest and original advocate for fast-tracking foreclosures for vacant and abandoned properties. First, gathering a consensus of all stakeholders from banks to consumer advocates and then taking the message to the Statehouses. He would often say the only one he was hurting was himself. The shorter time a vacant property remains in the foreclosure process meant less inspections and maintenance would be needed by his company. Why? Because it was the right thing to do for the community at that time.
In reflection of my late father-in-law I often ask, how can I replicate his strategies within MuniReg?
There is a small percentage of communities that require registration of a property based on mortgage “default” by the homeowner, which is a misguided and dangerous approach. By complying with the ordinance one can argue the registering party (bank/mortgage company or their agents) is disclosing confidential information – a borrower’s delinquency. I am not a lawyer, and don’t play one on TV, but am a consumer advocate and know the difference between right and wrong. And disclosing a homeowner’s delinquency is wrong.
The right thing to do is require registration only at the earlier of 1) vacancy and 2) filing of Notice of Default/Lis Pendens, a public document. This clarification is important not only because of privacy protection for homeowners, but also because default does not cause blight – vacancy and abandonment causes blight.
Some municipalities, just by utilizing the term “default”, though intending to the filing of the notice of default/lis pendens leave it open to misinterpretation.**
If the intention truly is for default, that is even more egregious. There is nothing that can be done with the information. One can not approach the homeowner offering assistance because you are shining the spotlight on the fact that his/her privacy has been violated.
Do banks realize when they comply with these types of registries the impact it could have on their Gramm-Leach-Bliley Act compliance? If they are not compliant, what is the exposure to liability for the community requiring this type of registration?
In 2019, with privacy concerns so prominent, a risk like this is just not worth taking.
So, if for whatever reason a municipality wants to require registration based on delinquent mortgage payments, thereby assuming unnecessary risks, MuniReg will be unable to provide services and assistance.
However, MuniReg will continue to advocate for the privacy of the homeowner, because it’s the right thing to do.
**The issue/concern is requiring registration upon “default” of mortgagor. Requiring an inspection of the property and then registration only upon discovering property is vacant/abandoned, I believe should not be of concern