For decades, the National Association of Mortgage Field Services (NAMFS) has been under fire for its member’s refusal to increase pay for services in the Mortgage Field Services Industry. For nearly thirty years, NAMFS members have overseen bottom of the barrel pricing for services such as inspections at the $3 level and a continued demand for mandatory discounting from Labor hovering around 25%. For an Industry plagued with employee misclassification litigation — tens of millions of dollars have been paid out over the past decade alone — the reality is telling an independent contractor precisely what they may charge smacks of price fixing and anti trust. And remember, that same occupancy inspection used to be if you see cars, people on the porch and the grass is mowed, take the photo and move on. Today, that inspection now requires 30 – 40 photos including your hand on the door, even more questions to fill out, and you have less than 48 hours to complete. With that said, it has been hard to peg the amount of loss Labor has experienced. Yesterday, that changed.
Larry Summers is the former Treasury Secretary under the Obama Administration, a professor at Harvard, and has written countless papers on the US economy. In a Bloomberg transcript of Stephanie Flanders Stephanomics released on 23 December 2021 between Flanders and Summers, the number is astounding,
If you look at the relative price of a day in a hospital and a television set, it’s changed by a factor of 100 since the ‘80s. That means we’re in a very different economy and a much larger share of the economy, a much larger share of the people working are in sectors that have a range of market failures.
A factor of 100 fold increase in pricing since the ’80s versus today. The reality is that the only thing which has changed in the US Department of Housing and Urban Development‘s (HUD) Mortgagee Letter (ML) pricing is a drop which occurred in ML 2016-02, back in February 2016, wherein the inspection pricing was decreased. NAMFS member pricing, though, has continued to increase when you look across the board at such things like the HUD Management and Marketing (M&M) Field Service Manager (FSM) contract. Moreover, though, the continued price gouging of discounting at 50% of all services — 25% on the ML pricing and yet another 25% on the bid side — equates to hundreds of millions of dollars in profit based upon Altisource CEO Bill Shepro’s statement in their Earnings Call back in August, 2020,
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.
According to the St Louis Fed, we are hovering around 3% with that number expected to skyrocket as the Dodd – Frank Regulation X moratorium is lifted on 31 December 2021. Now, my math isn’t as good as used to be; however, that would mean there is about $3 Billion moving into our Industry. Another thing to consider when looking forward at potential volumes is how long will the inflated valuations stick around? “A hefty correction appears to be due,” is how Ian Shepherdson, chief economist at Pantheon Macroeconomics, put it in a note to investors. Combine that with inflation; with a broken supply chain; and a polarized Congress who just cut off advanced earned income credits to over 30 million people and I would say you have a recipe for disaster when it comes to servicing the veritable deluge of distressed assets coming down the pike.
I want to be clear on something. Just because a home enters into delinquency does not necessarily mean that it will enter the Industry for any reason other than inspection purposes. In fact, many homeowners have plenty of equity built up which they could easily sell their home and break even if not make a profit. What it does mean, though, is that the normal channels of inspection, preservation, and lawn maintenance will become far more acutely defined.
I won’t belabor the wage growths everywhere else with zero overhead required by our Industry — $16.40/hr at WalMart; $17/hr at Wendy’s; and $24/hr at Amazon or NAMFS Executive Director Eric Miller’s $100,000 +/- yearly bonuses — most with signing bonuses and full benefits. What I will dwell upon is the timing of pay. Most NAMFS members wait 30 – 45 days before paying and when they do pay they have a horrible track record of subtracting chargebacks — the taking of your money for dubious reasons — when you get a final check. The only exception I am aware of is ServiceLink which generally pays you in five days — that is not a typo. So, think about that for a moment. Not only is your money being held, interest free, for weeks, but NAMFS members are judge and jury when it comes to taking your money. And some folks are content with that as they are primarily order mills. Honest, hard working Americans are not — as they pay the bills!
The reality is that in 2022, the Industry will have a reckoning; the Industry will have to make up for 30+ years of waste, fraud, and abuse or the Industry will not have Labor. The reality is that the vast majority of Labor in our Industry are between 35 – 55 years old. And it is that very same generation which is, more and more, becoming the Great Resignation which we wrote about last week. Anyone whom tells you that they are content with the way things are today — whether it be pay, simplicity of the work order, or otherwise — is a liar.
Industry apparatchiks abound and are most visibly seen through the lens of social media. They parrot the party line of profits before people serving as insulators to NAMFS members. And it is these very same charlatans that Foreclosurepedia has advocated to remove throughout our history. With NAMFS members taking 50% of the money and order mills diluting by yet another 25% — if not more — the sustainability of a working serf class to the feudal lord has never been more in jeopardy. And for those firms telling you that more volume will increase your profit, even without inflation it was the Big Lie. Today, though, that mentality simply allows you to truly understand what NAMFS members think about Labor. If Labor misses its opportunity to organize, it will be yet another 30+ years — if even then — that the chance comes around. Whether it be joining the International Association of Field Service Technicians (IAFST) or features below, make sure that you make the most of 2022!
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