Sat May 25 3:50:33 EDT 2024

Mortgage Delinquencies Up in Half a Dozen States

Vermont and New Hampshire led the charge in mortgage delinquencies at 24 and 23 percent respectively. Rhode Island came in behind them at 20 percent. “Higher unemployment, lower personal savings, increases in property taxes and insurance, and a run-up in credit card debt and delinquency contributed to conditions that would make it tougher for some homeowners to make their mortgage payments,” Marina Walsh, MBA’s vice president of industry analysis, said in a statement. New Hampshire and South Dakota rounded out the bottom of the list at 4.7 and 5 percent respectively. So, how does this translate to work? Glad you asked!

Virtually all originators whom provide contracts to Prime Vendors are open to engaging boots-on-the-ground Labor. Fact of the matter is they realize services are performed more rapidly and that more of their money is applied to the service rather than overhead and profit.

We have multiple articles out about how Contractors may engage originators direct. In addition, Credit Unions, Realtors, and investors are always looking for skilled Contractors. Foreclosurepedia consults on behalf of nearly 50 different clients each month pushing their agenda. If you need help and want to Retain Foreclosurepedia, feel free to reach out today!

NOAA Sounds the Alarm: Active 2024 Hurricane Season Predicted

The National Oceanic and Atmospheric Administration (NOAA) has released its forecast for the 2024 Atlantic hurricane season, and it’s a cause for concern. Forecasters are predicting an “above-normal” season, with a higher-than-average number of storms, hurricanes, and major hurricanes. This is particularly significant because NOAA’s May forecast is the most active ever issued at this time of year.

The official hurricane season runs from June 1st to November 30th, but NOAA’s predictions offer a glimpse into what we can expect. Here’s a breakdown of their key findings:

  • Storm Surge: NOAA predicts a range of 17 to 25 named storms, which are tropical cyclones with sustained winds of 39 mph (63 kph) or higher. This is well above the average of 14 named storms per year.
  • Hurricane Watch: Out of the predicted named storms, 8 to 13 are forecast to become hurricanes, meaning winds reach 74 mph (119 kph) or higher. The average number of hurricanes per year is 7.
  • Major Threat: The most concerning aspect of the forecast is the prediction of 4 to 7 major hurricanes. These are Category 3 or higher storms, packing winds exceeding 111 mph (178 kph) and capable of causing devastating damage.

The confidence level in these predictions is also noteworthy. NOAA forecasters have a 70% confidence in the predicted ranges. This means there’s a 70% chance that the actual number of storms will fall within the specified range.

Why the Active Season?

Several factors are contributing to the anticipated above-normal activity.

  • Warm Waters: The Atlantic Ocean is currently experiencing near-record warm temperatures, which provide fuel for tropical storm development. Warm ocean water allows these storms to form and strengthen.
  • La Nina’s Influence: The Pacific climate phenomenon known as La Nina is expected to develop. La Nina conditions typically lead to reduced wind shear in the Atlantic, an atmospheric condition that can hinder storm formation. With less wind shear, storms can develop more easily.
  • Trade Wind Troubles: A decrease in Atlantic trade winds is also anticipated. These winds help to suppress storm formation, so weaker trade winds create a more favorable environment for cyclones.

Where to Avoid Work

Florida presents a unique set of challenges for contractors doing hurricane repair work, and those challenges are often intertwined with the troubled state of insurance. Here’s a breakdown of the issues:

Contractor Headaches

High Demand, Low Supply: After a major hurricane, demand for qualified contractors skyrockets. This can lead to a shortage of qualified workers, driving up labor costs and making it difficult for homeowners to find someone to do the repairs.

Material Mania: The surge in demand extends to building materials as well. Supplies like roofing shingles, windows, and lumber can become scarce, leading to delays and inflated prices.

Insurance Wrangling: Dealing with insurance companies can be a nightmare for contractors. Often, insurers undervalue repairs, forcing contractors to fight for fair compensation. This can lead to lengthy delays in getting repairs completed.

Fraudulent Activity: Unfortunately, some bad actors take advantage of the chaos after a hurricane. Unscrupulous contractors may offer shoddy work at inflated prices, or disappear with deposits without completing the job. This can damage the reputation of honest contractors and make homeowners wary.

Insurance Issues

Denials and Delays: Florida homeowners frequently face denials or delays on insurance claims after hurricanes. Insurers may deny coverage for certain types of damage or find reasons to minimize the payout. This leaves homeowners struggling to afford repairs.
Lawsuit Lottery: Florida has a high number of lawsuits against insurance companies related to hurricane damage. This adversarial environment drives up costs for insurers, which can lead to higher premiums for homeowners.

Company Exodus: Due to the high cost of claims and lawsuits, some insurance companies are simply leaving the Florida market altogether. This reduces homeowner choice and can make it difficult to obtain coverage.

Contractors and Inspectors Have Zero Protection from Litigation

Florida’s Assignment of Benefits (AOB) Clause: This clause allows homeowners to transfer their insurance benefits to the contractor performing the repairs. This can incentivize some homeowners to sue the contractor if they’re unhappy with the repairs or the price, even if the disagreement stems from issues with the insurance company’s payout.

Frivolous Lawsuits: Unfortunately, Florida has a reputation for a high number of lawsuits against contractors, some of which may be baseless. This can be due to misunderstandings about the scope of work, disagreements with the insurance company’s payout that get directed at the contractor, or even attempts to exploit the AOB clause.

High Cost of Defense: Even if a lawsuit is ultimately dismissed, the cost of defending against it can be substantial for contractors. This can eat into profits and discourage smaller companies from taking on hurricane repair work.

The Impact on Contractors

Reduced Participation: The fear of lawsuits can deter some qualified contractors from entering the Florida market altogether, especially smaller companies. This reduces the pool of available contractors, making it harder for homeowners to find someone to do the repairs, especially in remote areas.

Increased Costs: To mitigate the risk of lawsuits, some contractors may raise their prices or require hefty upfront deposits. This can make repairs even more expensive for homeowners already struggling with hurricane damage and insurance issues.

Defensive Practices: The threat of litigation can also lead contractors to adopt overly cautious practices. They may be hesitant to take on complex repairs or may require extensive documentation and detailed contracts, which can slow down the repair process.

Originators Begin Hiring Direct in Massive Industry Shakeup

In a dramatic about-face change in labor acquisition, originators are turning to boots-on-the-ground in order to handle their time sensitive operations. The reasons are myriad; however, the experiences relayed to me revolved around the inability of untrained Industry personnel to be dispatched in a timely fashion. The reality is that when you have no regulation or training in an Industry that is accustomed to paying a bottom dollar rate, you end up with an inability to function from an agile perspective. It is not that Contractors in our Industry are unable to perform the services required for rehabs or tenant turns, quite the contrary. The issue is that when you are paying Labor less than minimum wage, those people are waiting nearly two months to be paid and fronting all of the material, and then you seize their pay for illegal chargebacks, no one will do the work for you.

IAFST University has already begun developing CTDL compliant digital certification for this field due to release on 15 June 2024. At less than $10 a year, the reality is you cannot afford not to get the training! Here is an example of one of my credentials.

aDoor, Abodea, Elara, MSR, Shellpoint, and a dozen others are actively seeking trained Contractors for immediate hire at competitive wages. The reality is that less than 10% of those I have migrated out of the Industry have ever returned. The gutter churning pricing and fraud, combined with the entrance of illegal aliens into the work force were the two main reasons Labor remained in their new partnerships. Pricing helped as well. 😉

If you want a white gloved experience, feel free to reach out and Retain Foreclosurepedia. Otherwise, it really isn’t rocket science pitching your firm to these property management firms. And when you have CTDL framework training and digital credentials, the sky is the limit!

New Trade Association on the Horizon? Labor Unsatisfied with Options.

After years of promises to Labor by both the National Association of Mortgage Field Services (NAMFS) and the International Association of Field Service Technicians (IAFST), many are coming to the conclusion that neither Association appears to have Labor’s best interests in mind. As hundreds of millions of dollars have flooded into the Prime Vendor’s coffers since the massive price increases from Fannie Mae, Freddie Mac, and HUD, Labor has felt none of it. Regardless of what Wall Street is doing, inflation has dug in for the common man and woman and the $5.90 inspections simply have not kept up with the 33% increase in fast food and 26% increase in groceries, not to mention energy, housing, and other expenses. To put it more clearly, pricing has not increased for any line item in this Industry since the 1960’s, and has actually gone down. This, while inflation has risen 896%, and housing prices have risen by more than 2,350% since then. During that same time, rent rose by 892%. As a testament to the failure of these two Associations, there has been “… a mass exodus of over 70% of the experienced vendors since 2015, according to a NAMFS document entitled Mortgage Field Services Pricing Discussion released in 2022.

For years, I have dealt with Board members at each Association. Much like an activist investor, I have been tasked to complete things which the Boards themselves were incapable of doing. A good NAMFS example was the recent exposing of Jonathan Dedman Dietz of GIS Field Services in order to contend with his Board position while churning out $5.90 inspections. With respect to the IAFST it was the creation of the IAFST Federation of Labor to address their Board’s refusal to communicate with rank-and-file.

In recent surveys submitted to NAMFS and IAFST members, less than one in one hundred — that is less than one percent — had ever heard from their Board for anything other than to collect dues. And when it came to satisfaction with their Boards and value add from paying dues, that number was in the lower 20th percentile. We know that NAMFS membership losses are enormous simply from their IRS 990 filing. Details on the IAFST Membership is a bit more murky; however, what Labor remaining there has made it clear, without changes they are gone at the end of the year. Labor is mad and they have every right to be. Both NAMFS and IAFST have Prime Vendors on their Boards and none have had any interest in Industry wide price increases. And while both Associations have access to third party educational platforms, adoption has been minimal and neither Board has championed it as a means to increase pay.

Trade associations are supposed to be bastions of industry advocacy, offering a collective voice for member companies and safeguarding their interests. The Board serves at the leisure of its Membership and is not a privilege, but an honor.

    • Stalled Advocacy: What has your Board done for you lately? An ineffective Board can become entangled in internal politics, wasting valuable time and resources on a monthly meeting that has no meaning to its Membership when actions are not taken. This leaves core advocacy efforts neglected, with the Association failing to represent Member interests effectively before policymakers and regulators. It is even more problematic when Boards refuse to communicate with its Membership.
    • Irrelevance Breeds Apathy: Does your Board Make You Excited? When a Board prioritizes its own agenda over Member needs, the Association’s programs and initiatives become irrelevant. This disengages Members, leading to declining participation and dwindling financial resources, creating a vicious cycle.
    • Missed Opportunities: What Programs or Initiatives Has Your Board Put Forth? An out-of-touch Board might miss crucial Industry trends and fail to adapt to a changing landscape. This can leave Members vulnerable to new competitors and emerging threats, hindering their ability to thrive.
    • Membership Exodus: Do You Want an Association That Represents You? Ultimately, the biggest peril is a mass exodus of Members. Frustrated by a lack of value and representation, companies will seek alternative channels to address their needs. This can lead to an Association’s decline or even its dissolution.

These are the questions Foreclosurepedia is asking. We are digging deep as the time has come for Labor — true Labor — to determine their own future. In the case of the IAFST Federation of Labor, a caucus of the IAFST, it is contemplating breaking away from its parent association. In fact, not only has the Federation created its on website, they have branded their own domain. Discussions have been underway since the beginning of the year to gauge support, which has been overwhelming. As many know, our Founders Meeting was held last week and we voted to finally go public. Whether or not we petition the IRS for a stand alone 501(c)(6) depends upon a vote next month. That is the thing, you know? You may have all the titles in the world, but they are meaningless when you forget that your Membership paid the bills and empowered you. It’s like calling for a war and no soldiers show up to fight. 😉

The technical, post-mortem will not be made public anytime soon. Suffice it to say that the IAFST Federation of Labor stands with Labor. More details will be forthcoming, including Membership options and carryovers for those holding IAFST Memberships.

Our stats today come from a Survey launched last month. While we initially only surveyed 100 Association members, if you would like to participate in an anonymous survey that collects ZERO identifiable information, feel free to click here.

The Pantomime of Jerry Mavellia’s AMS Part 60 Court Filing

When we began peeling back the layers of the rotten onion called Asset Management Specialists (AMS), one has to understand its purchase by Mortgage Contracting Services (MCS) only accelerated the decay. The core of that rot was Lee Mertins and his Merry Band of Fraudsters. It isn't simply disgruntled contractors who were robbed of their money, multiple AMS employees were extremely candid in their statements about AMS prior to Jerry Mavellia's litigation. Understanding the timeline means everything when it comes to Mavellia's claims and . . .

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