A private-philanthropic partnership aims to acquire, renovate and sell or rent out 50 vacant houses in the southeastern city neighborhood this year -- and could tackle hundreds more.
According to county records, the county land bank sold this property to Slavic Village Recovery LLC for $2,495.
The county land bank has hoarded this property since May 2011 and has saved it for such a special occasion.
Safeguard Properties founder and chairman, Robert Klein, believes lenders will give away those troubled houses, starting in Slavic Village, to get the burden off their books.
Klein's goal: Get a house for free or for very little money. Invest $40,000 to $50,000 in renovations, using Safeguard's national network of contractors to lower the cost. Then sell the house for $60,000, turning a small profit and providing affordable housing in a city neighborhood.
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I investigated Safeguard Properties for years and this company has received more complaints than any other company that I am aware of. Contractors across the country have resorted to creating their own websites to complain and spread the word about Safeguard Properties con game:
If you google 'Safeguard Properties Complaints Lawsuits" you will find hundreds and hundreds of complaints and lawsuits.
Another major complaint regarding Safeguard Properties is with contractors entering occupied homes that are in the beginning stages of foreclosure. Contractors are hired in an attempt to secure these properties and protect the mortgage holder's interest.
Property owners across the country come home to their still LEGALLY owned and occupied homes , only to find locks changed and personal items stolen. No foreclosure was even granted in court. Some homeowners were completely wiped out by these thieves. THOUSANDS of property owners have complained about this issue.
Safeguard Properties Internal Documents Reveal Rampant Complaints Of Thefts, Break-Ins
Outside in the world, Safeguard Properties was supposed to be protecting millions of homes that had slid into foreclosure, shoring up and repairing abandoned properties for the banks that were responsible for tending to all this real estate gone bad.
But inside the offices of Safeguard’s complaint department, Kevin Kubovcik says he gained a starkly different perspective on his company's pursuits as allegations of incompetence, malevolence and larceny rolled in day after day.
People with legal title to their property called to complain that Safeguard contractors had broken into their homes and carted off family heirlooms, valuable artwork and weapons, he recalled. People living next door to foreclosed properties complained that Safeguard mixed up the addresses and locked them out of their own homes.
Complaints came in seemingly without end. "I'd pick up the phone, put it down, and then it would ring again," Kubovcik said.
A
recent Huffington Post investigation focused on Safeguard as the largest player in a little-scrutinized industry spawned by the American housing bust: the contractors tasked with the gritty work of maintaining a veritable empire of distressed real estate. Safeguard has been the target of dozens of lawsuits alleging that its contractors have wrongly broken into properties and carted off people’s property.
In response to previous questions from HuffPost about break-ins at occupied properties, Safeguard dismissed such incidents as "extremely rare" compared to the sheer volume of jobs the company manages. But Kubovcik, who logged and investigated complaints for more than two years until he left the company in April 2010, said his experience attests to precisely the opposite.
To Clean Up Foreclosure Mess, Banks Rely On Little-Known Industry Plagued By Fraud, Abuse
Last March, a 23-year-old bank contractor cut through the secured gate at the entrance to a farm in Little Rock, Ark., and proceeded to a small house on the property. There, according to a police report, he broke the lock off one of the doors and forced his way inside.
The man, who police would later identify as David Cole, was allegedly there on official business: He worked in a little-known but booming industry that maintains and inspects millions of foreclosed and abandoned homes owned by mortgage lenders in the wake of an epochal real estate bust. The bank responsible for this particular home had presumably decided that the home was another discarded mess, and Cole's company had been dispatched to shore the building against the ravages of weather and decay.
The owner of the property, a recently widowed woman named Marie Osborne, acknowledges that she was indeed in foreclosure. She was away when Cole arrived, she said. Still, the house was very much hers and far from abandoned, as even a cursory review would have made clear, according to a lawsuit she subsequently filed.
When she returned home, Osborne was "astonished" to discover that her doors had been padlocked and her belongings ransacked, she claims. A grandfather clock was missing, along with an antique gold mirror, several televisions and family photos, Osborne alleges.
Osborne filed the lawsuit against those she asserts are responsible -- Safeguard Properties, a Valley View, Ohio-based firm that has quietly become a giant in the business of tending to abandoned properties, and Daryl Cole, proprietor of Cole & Sons, a local business that was supposedly acting as a subcontractor.
Fraud, abuse, theft, larceny, incompetence and malevolence. Safeguard Properties will fit right in with the County Land Bank.
Safeguard has been working with the county land bank for years. It is no surprise to read about the County Land Bank's willingness to give this company taxpayer's property that the county land bank has hoarded from other possible investors. Again, another selective beneficiary of taxpayer property.
Renters, Homeowners & Investors: The Changing Profile of Communities
February 26, 2013
Renters, Homeowners & Investors: Panel 3
Well, one of the--I talked earlier about the Slavic Village partnership that we're working
on with--for ForestCity and Safeguard and quite frankly is that mix and match. Safeguard is
coming in, understanding that not every property is going to be turned over and become
homeownership but they're going to hold and that's where ForestCity comes into play. They're
going to hold the properties and put them into the rental portfolio. So, the key to the partnership
was that they want to be able to hit a 2,000 house block of--2,000 houses in a number of blocks
and touch everyone of them.
The plan was put in place a couple years ago:
Tuesday, June 28, 2011
Major banks may give away discarded residences to cut losses
City sources said the representatives are from Safeguard Properties of Cleveland. Also in the meeting was James Rokakis, former Cuyahoga County treasurer who worked on foreclosure issues there. Spokeswoman for Safeguard Diane Fusco confirmed the discussions were under way.
And Robert Klein of Safeguard Properties has traveled the country on a 'demolition crusade':
Fernbacher’s company GSPS is a contractor for several property preservation firms. All they do is tear down homes. They are the last resort for many communities all over the country overrun with blight.
One of Fernbacher’s clients is Safeguard Properties, the Ohio-based property preservation firm. Its founder Robert Klein is taking Fernbacher around the country this year from conference to conference on a demolition crusade, to convince cities to pursue the clean slate their hardest hit communities crave.
Their first opportunity is a quiet place left even more silent after the housing downturn. In Slavic Village, a community located in Cleveland, Ohio, home prices plummeted from nearly $150,000 during the housing boom to roughly $39,000 today, according to data from Altos Research.
Safeguard and GSPS will start a pilot program this year to demolish 2,200 Slavic Village homes that are considered beyond saving. But it isn’t as simple as that.
Barbara Anderson was one of the first black homebuyers in Slavic Village. According to her Senate testimony in 2007, a broker approached her with a refinancing proposal and approved her for a loan at 8.5% through the now-defunct Conti Mortgage. Within four years, the rate jumped to 14.5%, pushing her monthly payment higher by nearly 60%. Her loan was sold 15 times over that time. Today, the result is apparent. Slavic Village is a ghost town.
Klein with community leaders and the local city council president in February with their solution.
Safeguard placed all Slavic Village properties into three categories. Owner-occupied homes fall into the first category, homes in need of rehabilitation but vacant are the second category, and the third category consists of ones that need to come down.
Most of the properties sit in either of the first two categories, but any progress waits on tearing down the ones in category three.
“No developer will come in when you have five occupied properties, five vacant properties and one that needs to be demolished. Those five properties are affordable, and can be rehabbed fairly cheaply. But nobody will come in until you’ve demolished that one property,” Klein said. “What we’re doing now is we’re putting together a model to make this thing work in Slavic Village. If it works in Slavic Village, we can do this anywhere in the country.”
Safeguard Properties had their dirty little hands in the county's land bank for a long time:
On a national level, two organizations are working to acquire REO properties and connect them to local organizations:The nonprofit
National Community Stabilization Trust was formed in 2008 by six national nonprofits with expertise in community development and
housing.The REO Clearinghouse, a for-profit agency formed by Safeguard Properties, was established in early 2009.Both agencies’ purpose
is to help stem the decline of communities with high concentrations of vacant and abandoned property by connecting national-level servicers
with local community development organizations, offering foreclosed properties to these organizations at discounted rates. Cleveland
was one of the first cities to work with both the Trust and the REO Clearinghouse. Although these organizations’ current efforts in northeast
Ohio are small in scale and strategically focused on very specific areas, they will help inform and direct broader efforts going forward.
REO CLEARINGHOUSE formed by Safeguard Properties is certainly 'clearing house' in Cuyahoga County:
Every day, Cuyahoga County Treasurer Jim Rokakis gets correspondence from new Cleveland real estate investors that makes him crazy.
Also with the company is Northeast Ohio’s Robert Klein, CEO of Safeguard Properties, one of the largest caretakers of foreclosures for financial institutions. Treasurer Rokakis says the county’s new landbank is looking at buying about 550 Cuyahoga County homes through REO Clearinghouse.
Jim Rokakis:The clearinghouse will be a logical place to go to acquire properties for the land bank not in groups of one or two or three or four, but a place to go to acquire properties in groups of hundreds.
Safeguard Properties has control over demolitions and county taxpayer's property in the land bank.
This is probably the biggest scam yet in Cuyahoga County. Much bigger than Jimmy Dimora being bribed with prostitutes.
Safeguard Properties should have used this 'donation' money to pay one of their many contractors that have been cheated out of their money:
Western Reserve Land Conservancy Donors
Visionaries
$25,000 and over:
It's time to free Frank Russo and Jimmy Dimora from federal prison. I would rather deal with those two corrupt thieves than this one that has devasted folks across the country.
This sums it up:
"Oh no.. Robert Klein is involved!!! Not a good thing for the City Of Cleveland. It comes down to cutting corners to make the most money possible. He has no intrest in helping the city it is just about how much money he can get out of the property. It makes his other company look good to the banks he works for by getting rid of the properties they have in inventory and let the city pay the bill to tear it down. Just keep a good eye on this guy. "
http://www.cleveland.com/business/index.ssf/2009/05/reo_clearinghouse_wants_to_act.html
*** UPDATE *** We are currently seeking other homeowners who were wrongfully evicted from their homes by Safeguard Properties or one of their vendors. Most states have a consumer fraud law that prohibits a banks and property managers from illegally breaking into one’s home, changing locks, falsely telling homeowners they can’t return and from stealing one’s personal possessions.
In addition to homeowners who may have become victim to Safeguard, we are also seeking to talk to vendors or contractors who have knowledge of Safeguard’s practices.
For more information or to see if you have a potential claim, contact attorney Brian Mahany at brian [at] mahanyertl [dot] com or by telephone at (414) 704-6731 (direct). All potential client inquiries are protected by the attorney-client privilege and kept in confidence.
Post by Brian Mahany, Esq.
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Others across the country are alleging discrimination against Safeguard Properties relative to "significant disparities in the maintenance of foreclosed properties in communities of color compared to White communities."
The Cuyahoga County Land Bank is GIVING Safeguard Properties FREE property in the exact same neighborhoods in which Safeguard Properties was hired by lenders to maintain and 'safeguard' this property.
Now the property is 'distressed' and both the land bank and banks are giving Safeguard this property for free.
This is a major conflict of interest and waste of taxpayer's money.
STATEMENT IN SUPPORT OF COMPLAINT OF
THE NATIONAL FAIR HOUSING ALLIANCE; MIAMI VALLEY FAIR HOUSING
CENTER; FAIR HOUSING CENTER OF CENTRAL INDIANA; TOLEDO FAIR
HOUSING CENTER; HOPE FAIR HOUSING CENTER; AND SOUTH SUBURBAN
FAIR HOUSING CENTER
AGAINST SAFEGUARD PROPERTIES
I. INTRODUCTION
The National Fair Housing Alliance, Miami Valley Fair Housing Center, Fair Housing
Center of Central Indiana, Toledo Fair Housing Center, HOPE Fair Housing Center, and South
Suburban Housing Center (collectively, “Complainants”) bring this complaint based on
Respondents Safeguard Properties LLC and Safeguard Properties Management LLC’s
(collectively, “Respondents”) racial discrimination in their maintenance of foreclosed homes in
violation of the Fair Housing Act of 1968, as amended, 42 U.S.C. § 3601 et seq. (“FHA”).
Confronted with a national foreclosure crisis, Complainants have turned their attention to
the maintenance and rehabilitation of foreclosed properties in an effort to ensure that all
communities are being treated equally by those responsible for maintaining foreclosed properties
and preparing them for resale. Far from equal treatment, there are significant disparities in the
maintenance of foreclosed properties in communities of color compared to White communities.
Respondents are Field Service Vendors (FSV) that have contracted with Fannie Mae to
provide property maintenance services at Real Estate Owned properties (REOs) owned or
controlled by Fannie Mae. Respondents have engaged in a pattern of discrimination through
their selective fulfillment of their FSV responsibilities based on race. Specifically, Respondents
maintain Fannie Mae properties located in White census tracts noticeably better than they
maintain Fannie Mae properties located in predominantly African-American and Latino
neighborhoods in the same metropolitan area. Respondents have engaged in such discriminatory
conduct in communities across the country, including Dayton, Ohio; Indianapolis, Indiana;
Chicago, Illinois; and Charleston, South Carolina.
The result of the Respondents’ unlawful behavior is deteriorating and neglected
structures in minority communities, as compared to well-maintained, attractive properties in
White neighborhoods. Respondents’ conduct has impeded neighborhood stabilization and
economic recovery, and harmed investors, homeowners, and municipalities by unnecessarily
depressing property values.
http://nationalfairhousing.org/Portals/33/2013-03-21%20Safeguard%20Complaint_FINAL.pdf
Safeguard Properties is allegedly "unnecessarily depressing property values across the country", so our county has decided to give them FREE property in areas which have depressed property value- which Safeguard Properties probably contributed to the depressed value in the first place.