Have you reviewed your contracts lately? Foreclosurepedia has and the latest information is terrifying. Monday was President’s Day, a federal holiday. And while many were arguing about it’s storied history with respect to racial inequity, one thing everyone can agree on is that if you work on a federal holiday, your pay must legally be time and a half overtime. Nothing, though, could be further from the truth if you work upon National Association of Mortgage Field Services (NAMFS) member’s contracts. In fact, while NAMFS members and the US Department of Housing and Urban Development (HUD) both labeled Inspectors and Field Service Technicians as Essential Workers during the early days of the pandemic, neither party has paid a single penny in additional wages to Labor. Additionally, neither party found it necessary to fast track COVID vaccinations for Labor even though Labor DAILY interacted with some of the highest risk individuals such as the elderly, those on kidney dialysis, and others with cancer. They did this all the while knowing that COVID infections were within the ranks of Labor and that that same Labor was, daily, crossing state lines. It is an abomination, to say the least. And that NAMFS members would regale in the profits they made and as HUD sat by with a wink and a nod, is a tragedy of Dickensian proportions. Even as the Biden Administration is lauded and praised for simply breathing oxygen, the reality is neither Joe nor anyone in his Administration, least of all Acting HUD Secretary Matt Ammon or his anticipated successor Rep. Marcia Fudge (D-Ohio), are in any hurry to cure the inequities visited upon Minority Females and Labor whom tirelessly and with great risk of infection, perform their required tasks upon distressed assets.
The demands to present medical insurance, lists of all sub-contractors with signatures and their medical insurance; demands for mandatory drug testing; and mandatory $1,000,000 auto policies for three dollar inspections smacks of authoritarian regime demands not seen since the early 1900’s during the anti-trust schemes of Standard Oil.
The recently viewed contractual demands are truly a paradoxical Les Misérables brought to life only in the way that the callous and predatory behavior of NAMFS members are capable of exhibiting. Moreover, though NAMFS members appear to have decided that COVID was the time for change when it came to their Contracts with Labor. Instead of looking at COVID as a time to improve relationships; instead of looking at COVID as a time to invest in quality Labor; and instead of looking at COVID as a time to strengthen the educational foundations of a rapidly changing Mortgage Field Services Industry, NAMFS members have slammed the door on any discussions.
Here is a quote from the Orwellian contract now demanded by HUD’s largest Awardee upon its Management and Marketing (M&M) Field Service Manager (FSM) 3.10 contract,
In the event that the person signing below is eligible to be exempt from Workers Compensation insurance as a sole proprietor if legally able to do so in the state in which they conduct their business, then they must provide both proof of medical insurance and sign this document below.
Two things happen here. First, for anyone with subcontractors IT IS MANDATORY that they list out all of their subcontractors by name. Second, IT IS MANDATORY that wet signatures — the most dangerous of all signatures for anyone ever to present electronically — be affixed from all subcontractors. The #Epic clusterfuck, not to mention time and costs involved, almost ensure that the meaningful ability to participate in US Government contracting is drawn to a conclusion. And finally, the possession of medical insurance cards and policy information raises the specter of violating the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), 42 USC 1320d and 45 CFR 160-164 (HIPAA).
And all of this coming from a NAMFS member whom recently had to send out legal documents from the General Counsel admitting to a potential breach of Labor’s Personally Identifiable Information (PII)?!
I mean who, in their right mind, cooked up this requirement? It gets better, though. As if forcing people to release their medical information wasn’t enough, there are now demands of MANDATORY DRUG TESTING for all office and in field personnel regardless of whether they are employees or subcontractors.
Prior to the provision of Service hereunder, Vendor, at its own expense, will conduct a third party background checks [sic] and drug screening on all personnel who will be involved in providing services.
Drug screening ON ALL PERSONNEL — Their words not mine! As we know, for a fact, that this NAMFS member provides work to all other NAMFS Top Tier Vendors, Foreclosurepedia is curious if, for a fact, they have required the same from say ZVN Properties, Cyprexx, Mortgage Contracting Services (MCS), or Spectrum Field Services. The answer is a resounding negative. In fact, the recent and far too cozy relationship of tossing a bone to their fellow NAMFS members, from the contractual point-of-view, screams of price fixing and Sherman Act Anti Trust violations in my opinion.
The demands, though, do not end there. In an Industry wherein the average pay for a delinquency inspection is THREE DOLLARS — that is not a typo — the auto insurance requirement is ONE MILLION DOLLARS! There is a demand to list all auto policies and vehicle information for EVERYONE regardless of position or role filled.
Here is the rub, as the bard would say, the biggest investment of a human being’s lifetime is placed in jeopardy for three dollars. In almost 99.9% of the time, Inspectors have zero licensing, zero training, and zero comprehension of what they are doing when determining occupancy status. That is a fact. Period. End of conversation. This means that the Inspector, whom must pay One Million Dollars for auto insurance in order to perform three dollar inspections, has a vested interest in making them assembly line — not dissimilar to the crinimal robo-signing of the 2008 Financial Crisis. And there is no proverbial off button as Foreclosurepedia has WELL DOCUMENTED over the past decade. Even worse, in many cases the Inspector will not be paid and must return at their own expense if they label the house as occupied! Once the house has been labeled unoccupied, a gauntlet of activity begins including, but not limited to, the changing of the locks on the doors; the removal of all property inside; the removal of any animals; and the seizure of any vehicles present.
Imagine, you and your family have left for the funeral of your children’s last grandparent due to COVID. Your son and daughter are distraught over the death of your wife’s mother. And when you arrive back, everything is gone and your locks have been changed. All the photographs of their grandmother now in the city dump; your children’s toys and beds gone; your dog and cat removed; and your wife’s car which she uses to go to the only job supporting the family taken.
You do not have to search through Foreclosurepedia too hard to find dozens of cases nearly identical to the above. Even more disconcerting is the simple fact that while HUD pays the bill for these activities — either through allowable and over-allowable expenses to the financial institutions whom directly compensate to NAMFS members, they refuse to become involved in any complaints no matter how egregious. While Foreclosurepedia chronicled multiple attempts to have the HUD Office of the Inspector General examine a litany of charges including outright fraud committed against the US Government based on False Claims Act violations, there is not a single account of HUD’s intervention.
So, what is the solution? Well, for years Foreclosurepedia has advocated for the International Association of Field Service Technicians (IAFST). The IAFST has been successful in building in roads with respect to education, organization, and message delivery. We have also advocated for a diversification in Labor with respect to engaging municipal, county, state and federal contracting by and through our Turn Key products listed below. The overarching problem, though, is that unless and until Management is placed in a precarious position of having to outright acknowledge Labor and collectively bargain, there never will be a motivation to negotiate. Additionally, unless and until Labor sees fit to have the US Government — HUD, VA, USDA, etc. — address their grievances, the reality is that not much is ever going to change.
The connective tissue in all of this is the simple and salient fact that the Industry wishes to deploy independent contractors; however, they know that they are, in fact, unlicensed and misclassified employees. On each and every single day, NAMFS members deploy a veritable army of unskilled and unlicensed personnel in all 50 State and Territories with the sole aim of transferring assets from the homeowner to the investor. That is the model, at the end of the day.
As we will discuss over the weekend on the Foreclosurepedia Podcast, that model may becoming to an end as HR 2474 was just moved to the US Senate. HR 2474 will remove almost all alleged independent contractors and convert them to employees in a fashion nearly identical to the Dynamex decision in California — see generally California Assembly Bill 5. And by the looks of the contracts which NAMFS members are rolling out, it may be a good thing!