Mortgage Contracting Services (MCS), a Littlejohn & Co. owned firm, has had a history of buying out its competitors and then selling itself off at bottom dollar. This expansionist strategy, recently, has begun to look more and more like an antitrust case in the making. Everyone remembers the purchase of Asset Management Specialists and then selling themselves to TDR Capital and Concentric Equity Group. After being sliced and diced, American Securities bought them out again. Then, in September of 2014, MCS purchased CoreLogic’s field services business unit. In 2016, MCS bought EPIC Real Estate Solutions, and and Lenders Title Solutions. In November 2017, MCS bought Carrington Home Solutions’ field services division. And in October of 2018, MCS bought the Miami-based M&M Mortgage Services, as well. And as COVID set in MCS collapsed and defaulted on over $400 Million in debt and Littlejohn & Co., LLC, Lynstone SSF Holdings Sàrl, funds advised by Neuberger Berman Alternatives Advisers, and Crescent Capital Group picked them up in 2020.
PR Newswire had a piece out that makes clear, independent contractors are not included in any way other than difficult to cover rural settings,
In 2022, MCS opened Service Centers in Phoenix, Dallas, Las Vegas, Orlando and Columbus, OH, with additional Service Centers slated to open in Atlanta and Tucson before year’s end. Markets on the MCS Service Center expansion roadmap include Houston, Tampa, Chicago, Salt Lake City, Denver, Indianapolis, Memphis, Nashville, Charlotte, Detroit and other markets in Florida and Texas, while assessing opportunities in New York, New Jersey and Connecticut.
Service Centers are staffed with a market director, project managers, estimators and highly trained service technicians to execute the field property services needs of the firm’s clients across the Mortgage, Residential Rental and Commercial Services lines of business. Additionally, MCS employs 12 of its own inspectors across Phoenix, Dallas, Columbus, Atlanta, Orlando, and Las Vegas with the ability to provide a variety of inspection services – including occupancy, property condition, disaster and loss draft inspections – across each respective state and nearby regions as needed.
And it came even more into focus earlier this year when MCS made yet another Littlejohn backed purchase as MCS bought Chain Maintenance Store. The significance of this is primarily understood by a BusinessWire article that came out earlier this year,
“We strive to be a true ‘go-to’ facilities services provider and fostered this partnership with Chain Store Maintenance to enhance our ability to provide customers with best-in-class interior and exterior services at all levels across the commercial and residential property services industries by leveraging MCS’s self-performing service centers and our combined, extensive vendor network,” said Craig Torrance, Chief Executive Officer of MCS.
About 19 months ago, Foreclosurepedia called the actions and almost to the month the timing of this shift from Contractor to Employee based institutional servicing. And back then even the #ForeclosurepediaNation was sceptical. As is normally the case, here we are. Normally, this would be water under the bridge; however, as Littlejohn also now owns GIS Field Services, controlled by National Association of Mortgage Field Services (NAMFS) Board member Jonathan Dedman Dietz, regulators have decided to take a closer look at NAMFS Executive Director Eric Miller’s blessing upon the mess. First, Miller and NAMFS President Matt Zoldowski moved Verisk into the Industry to control ALL property preservation — with only 2 inspection software options it should be noted — software and its bidding components and now they both are approving MCS’ shifting of all work from current vendors only over to GIS Field Services their sister company. In fact, as MCS moves their work to Littlejohn controlled GIS Field Services, miraculously all contractor data shifts, as well.
Housing and Urban Development (HUD) is taking note, as well. In fact, here is what a Senior HUD Official had to say about the current landscape,
Yes, the pre and post-conveyance servicing is still considered a Conflict of Interest, and we’re dealing with it on several fronts, including both the current Bridge contractors and the new awardees. I can’t confirm specifics, but can say we are aware of possible issues with both that need to be mitigated.
Even more concerning, though, is that the ever eluding ability for MCS to perform upon US government contracts, including their failure to take over the AMS HUD M&M FSM and the more recent 12SAD119R0003, issued by the Department of Agriculture (USDA), for property preservation and inspection services, is making desperation a common theme to stay afloat. In fact, whereas ISN won the IDIQ bid at $34,983,380 it made MCS’ IDIQ bid at $57,183,879 a sneak peak at their profit margin requirements.
More on the MCS move into employee based labor and their potential for Unionization later this week!
