National Association of Mortgage Field Services (NAMFS) members have begun seeing a slight increase in inspection orders as we approach the lifting of the final moratorium under the provisions of Dodd – Frank’s Regulation X. The rise in inspections, though, is overshadowed by the dramatic increase in COVID variant Omnicron infections. And whereas many would think that the low profit, low pay sector is not keeping Labor on the sidelines— many inspections end up paying only $3 to Labor — the reality is that while I do not believe it is sustainable under volume, there appears to be a fairly healthy cross section of labor available as opposed to the Field Service Technician side. Whether or not the hangover from holiday spending will equate into a labor market willing to work for NAMFS members at poverty level wages remains to be seen. Additionally, it appears that the timelines of Prime Vendors paying Regional Order Mills — between 30 – 45 days with problematic chargebacks taking yet another month or so if they are even paid — is adding strain across the Industry.
A series of mergers and acquisitions, bankruptcies, and closings have interestingly added more downward pressure on pricing with firms simply attempting to explain that more volume will make up for pay. It is a systemic problem when looking at the fact that Mortgage Field Services Industry pricing has not risen in nearly 30 years and actually fell in 2016. An added stressor is the fact that when M&As occur, the reality is the acquiring company tends to stick with their current contractors creating a gladiator setting for those being acquired or attempting to onboard.
Many are arguing that we are no better off than we were during the epic fraud runs of the 2008 crisis when fraud committed against Labor was in the 40th percentile. And it is hard to disagree when you look at the felony rap sheets which the very financial institutions have whom are allowed by the US Department of Housing and Urban Development (HUD) to run roughshod over Labor. JPMorgan Chase is the largest bank in the United States. It also has the scandalous distinction of having admitted to five criminal felony counts brought by the U.S. Department of Justice since 2014 and a breathtaking series of additional charges from other regulators — See its Rap Sheet here. Background checks are an abysmal failure, as implemented by NAMFS Executive Director Eric Miller, by and through Aspen Grove Solutions. A case-in-point is that ServiceLink, a Prime Vendor and one of the Top 3 NAMFS members, will not even allow Aspen Grove background checks to be used in their system. This is a pretty serious deal when you look at ServiceLink’s parent, Black Knight, whom controls in upwards of 85% of all mortgage origination software. The draining of tens of millions of dollars out of the Industry for a singular background check which may be used, simultaneously, by an unlimited amount of people is nothing short of fat which needs to be trimmed.
Lumber is back up over 135% since August and number is up nearly 1,600% pre-pandemic. Adding fuel to the fire is the doubling of tariffs upon Canadian lumber imported into the US slated for the beginning of 2022. According to the National Association of Home Builders, these prices increased the cost of building an average new single-family home by nearly $36,000. The problem here is as NAMFS members refused to give ANY pay increases for the past 30 years, lumber as well as pricing from MFS Supply — the largest supplier of locks and material in the Industry — has eclipsed any break even point and that does not even include inflation into the equation.
As if it could not get any worse for Eric Miller and NAMFS, on 07 January 2022 we are teeing up for the biggest argument the Industry has ever had. Oral arguments in the US Supreme Court (SCOTUS) will get underway with respect to vaccination requirements under the OSHA ETS requiring companies with more than 100 employees to vaccinate or test. The requirements for federal contractors to vaccinate, issued under, Executive Order 14042, are pending before SCOTUS and will be heard towards the end of January, 2022. While the 6th Circuit upheld the continuation of vaccinate or test requirements under the OSHA ETS, the 11th Circuit kept the suspension in place, with respect to federal contractors.
While no one in the Industry will admit it, there is stark terror on how SCOTUS will rule. Thirty years of zero wage growth and a nearly tripling in work requirements combined with a 100 fold increase in costs since the 1980’s will potentially make vaccination requirements the straw that broke Labor’s back. And as opposed to how NAMFS members have evaded all manner of illegal activities such as employee misclassification, there are built in mechanisms for the vaccination auditing process which allow Labor to cause tremendous financial pain when the chargebacks begin.
Other factors are contributing to labor attrition, though. The formidable rise in violence against Labor is on everyone’s mind. And the level of violence is markedly different than during the 2008 Crisis. For example, a Realtor was murdered and his body left in a crawlspace when attempting to evict a tenant in one of his apartments in Utah. In Florida, only a couple days ago, another Realtor was murdered by an evicted tenant while she was showing his former place of residence. And as we come out of the COVID foreclosure moratoriums, the reality is many of these homeowners whom have not made mortgage payments in over two years are unlikely to be cooperative — or peaceful — when the underpaid and ill prepared NAMFS zombie army arrive to evict them.
The only Industry which refused to increase pay for Essential Workers was the Mortgage Field Services Industry overseen by Eric Miller, Executive Director of NAMFS whom has been awarded nearly $10,000 annual salary increases and according to the latest IRS documents, receives over $134,000 per year.
And as the delinquencies increase, so to the the profits in NAMFS member pockets. All told, there is roughly $3 Billion floating around — and daily climbing — according to Altisource CEO Bill Shepro and his formula given in the August 2020 Earnings Call,
In a normal market, we estimate that for every 1% increase in delinquency rates, the addressable market for our default related services increases by approximately $700 million. Based on the increase in 30-plus day delinquency, since the beginning of the year, we estimate that the addressable market for our services has grown by over $2.7 billion. — Bill Shepro, Altisource CEO
Not a penny more for Labor, though. Stay tuned as later this week we release our Industry Rankings of firms out there which we call The Good, The Bad, and The Ugly! It is an article that neither Management nor Labor are going to turn a blind eye on and very well may keep contractors out of harm’s way.
