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One of the biggest issues hitting the Mortgage Field Services Industry today is, bar none, COVID. As many remember, Foreclosurepedia predicted the severity of the contagion in February, 2020, while everyone else figured it would never impact the US. With that said, though, it is here and spreading like wildfire. 13.2 Million infections and 265,000+ deaths. And the kicker here is that even though we reported upon the HUD Memo which mandated no in person contact through 31 March 2020, the vast majority of National Association of Mortgage Field Services (NAMFS) members are continuing to force direct, personal contact. And over the past week, these demands have triggered state health agencies to begin contact tracing of homeowners whom were potentially infected by inspectors whom had COVID. The tragedy here is that this was easily preventable. Moreover, though, the problem which presents is that there was absolutely zero reason to make contact other than the fact that NAMFS members are able to additionally bill for these types of services. It reminds me of the Kurt Vonnegut novel entitled Galapagos in which the names of characters who were destined to die before sunset were marked with an asterisk. It would appear that all non NAMFS members have an asterisk next to their name.
Out of the 144 Million or so residential mortgages in the US, roughly 40% are QM, or government backed, leaving the other 60% not backed by anything.
Conservative estimates peg the default rate at roughly 15.6 Million, all dropping at once, as we come into 2021. While that number is astounding — during the 2008 Crisis we had roughly 10 Million defaults over a period of 4 years — the number of evictions are estimated at 40 Million. I want that number to sink in, for just a moment. And remember, when the hammer drops there is going to be no breathing room; these evictions are going to drop immediately. Take Las Vegas, for example. The number of evictions are estimated at roughly 300,000 for Clark County where Las Vegas is located.
As of last week, Justice Court had opened up more than 5,000 eviction cases and granted nearly 2,500 orders since October. There is currently a backlog of about 1,000 cases.
And while these number are low — many renters are utilizing the CDC Moratorium through 31 December 2020 — come 04 January 2021, there is going to be an avalanche. I bring this up because first and foremost, the Mortgage Field Services Industry is severely lacking in qualified personnel and those whom service the Industry are severely underpaid. If anyone believes that these folks are going to continue to wait 30 and 45 days for pay, all the while facing enormous chargebacks, when they could be focusing on evictions where no one is present, there is zero liability, and they not only are issued the aesthetic repairs, but are paid immediately, then I have some beachfront property in Arizona to sell them.
The fact of the matter is that the effects of a combination of COVID, lack of volume, and recent consolidations forcing dramatic drops in pay have yet to be seen in the Industry. One reason is that with such a low volume, NAMFS members are capable of holding hostage Labor at virtually any price point they desire. In addition, many Field Service Technicians are reporting that the very assets which they serviced for pennies in hopes of getting bid work, are now being serviced by in house crews of the Clients whom sent the original work order. In fact, there has been a dramatic uptick in the hiring of W2 personnel for in field tasks. This has been an additional burden placed upon Labor’s shoulders in that what little proverbial meat left on the bone has now been stripped away. This, in combination with the inevitable opening of the money taps by the incoming Biden Administration for PPP and Unemployment — including 1099 Pandemic Unemployment Insurance — is an almost guarantee that when the volumes begin, the ability to service the assets with the current level of personnel is impossible. And it is only going to get worse as Winter truly sets in.
One of the ways in which Field Service Technicians are capitalizing upon the COVID landscape is by establishing a web presence by and through optimized websites. Less than 10% of Field Service Technicians even have a website. And much like how you dress for an interview, today a website, which provides branded email, opens the doors for both higher pay and larger business opportunities. Foreclosurepedia has successfully partnered with dozens of firms to these ends. Additionally, Labor is beginning to run the same types of investigations upon their new Clients which are run upon them. Criteria such as financial solvency, brick and mortar presence, and DUNS verification have replaced the social media word-of-mouth in the past. And finally, Labor is beginning to make investments in Technical Proposals so that they are capable of actually bidding municipal, county, state and federal contracts. If you are interested in the wide array of services Foreclosurepedia offers, you may view them by clicking here or going to: https://foreclosurepedia.org/products/
Wrapping up things, there has been a large boom in both new home construction as well as remodels and tenant flips. While many Field Service Technicians are not qualified for the new home construction, the reality is that there are dozens of contracts out there for the rehab side as well as tenant occupied turns. The Industry has been attempting to infiltrate these arenas; however, to date, the have been largely unsuccessful. Part of the reason is that by the time that NAMFS members take 40, 50 and 60 cents off of every dollar, the reality is that it is nearly impossible to get anyone to perform the work. Obtaining these contracts, though, is not that difficult and ultimately those whom invest in the process will be the real winners. Private label hedge funds are screaming for contractors and honestly, there will never be a perfect storm like COVID again in our lifetimes. Feel free to reach out direct if you are interested in retaining us. Additionally, if you are an inspector performing inspections upon distressed assets, Foreclosurepedia has the ability to repackage your information to Investors whom will pay top dollar.
