Over the course of the pandemic, as the Mortgage Field Services Industry has experienced extreme contraction coupled with over 70% Labor attrition according to the National Association of Mortgage Field Services (NAMFS), private label hedge funds such as Invitation, Hudson Homes, and Main Street Renewal became safe havens for Labor. As both fuel and inflation began to raise, that haven has substantially shrunk. More on point, though, in light of the feeding frenzy surrounding the collapse of the Zillow portfolio, the race to capture assets by the aforementioned as well as firms such as Redfin, has proven problematic for the balance sheets.
Recently, though, Foreclosurepedia has been hearing about many of the above firms stating that they have too many contractors and not enough work. It becomes extremely disturbing in light of the fact that historically this position has been associated with a pay-to-play scheme witnessed throughout the Industry.
The obvious elephant in the room has been pricing. ResiPro experienced this during their tenure with Hudson Homes and in fact sued many of their own Project Managers alleging fraud. And while many of the Project Managers settled their cases relying, ironically, upon insurance policies proffered by ResiPro itself, others did not with at least one Project Manager prevailing based upon a dismissal by ResiPro.
The reality is that Labor needs to be acutely aware of the fact that many of these hedge funds are against the wall when it comes to servicing the catalog of assets they currently have. Their hands are tied by things like Cap Rate and other profit based metrics. Labor needs to be blunt in their interrogatories of firms seeking their information before discussing volumes and pricing. Your information is a powerful commodity and it should be treated as such.
