As Housing and Urban Development issued tens of millions of dollars in inspection price hikes on Mortgagee Letter 2023-20, the only firm promising price increases, thus far, is Guardian Asset Management. In fact, out of 22 emails sent and Contact pages used, only Guardian had any positive sentiment stating that through the weekend they are going to work through their numbers and have a formal statement Monday. The question is will it be too little, too late? With both jobless claims as well as continuing unemployment claims rising with today’s Unemployment Insurance Weekly Claims Report release, the reality is that many folks may not be that disappointed in having to pick up a weekly check and not have to show up at work. Moreover, though, with the holiday season kicking into gear and the tightening of everyone’s budget in order to prepare both a Thanksgiving meal and purchase the Christmas presents, Labor is paying particularly close attention to whom is paying what. The days of Prime Vendors doing as they please may be numbered as the massive amount of inspectors and inspections controlled under the roof of the International Association of Field Service Technicians (IAFST) looks poised to flex their collective muscles.
The question that both the IAFST Federation of Labor and the IAFST itself are asking is whether or not Prime Vendors are willing to work with Labor on price increases. This, in conjunction with are Prime Vendors ready to move away from the Regional Order Mills whom have tended to absorb all of the price increases without passing along any of the money.
With the level that both technology and artificial intelligence are at today, the reality is the Regional Order Mills no longer serve much purpose — other than to dilute Labor’s wages.
As of October 1, 2023, there were approximately 7.5 million active FHA-insured loans in the United States. This represents about 13% of all outstanding mortgages in the country. The number of active FHA loans has been steadily increasing in recent years, driven by low interest rates and rising home prices. FHA’s serious delinquency rate, the percentage of mortgages in its portfolio that are 90 or more days delinquent, was 3.93% at the end of fiscal year 2023. To that point, FHA mortgages make up roughly 16% of the market.
So, the math is pretty simple, with respect to HUD inspection price hikes. 3.93% of 7.5 million is 294,750. If you factor only one exterior inspection the Prime Vendor pay becomes $8,842,500. And if you factor only one interior inspection, the Prime Vendor pay is $13,263,750. The combined total is $22,106,250. And the total amount they are paying Labor is roughly $2,947,500 for a single interior inspection, the same for an exterior inspection for a combined total of $5,895,000. This is an obscene $16,211,150 for doing nothing more than clicking a button.
Fact of the matter is that something has to fundamentally change. Not simply with pay, but with transparency of the work order itself. Join with the IAFST Federation of Labor and start having an honest discussion about what you would like to see changed. And support Foreclosurepedia as we continue our No Contractor Left Behind mission!
Editor’s Note: Today, the Federal Housing Administration (FHA) republished Mortgagee Letter (ML) 2023-20, Update to Property Inspection Fees, due to an inadvertent error in the Affected Programs section of the ML. The list of Affected Programs inadvertently omitted Home Equity Conversion Mortgages (HECMs) even though the HECM program, in addition to the forward mortgage program, utilizes the fee schedule found in the Single Family Housing Policy Handbook 4000.1, Appendix 7.0 Property Preservation Allowances and Schedules. Therefore, the ML has been corrected to ensure the list of Affected Programs properly accounts for the changes this will make for the HECM program as well.
