Pennsylvania and Texas both have one thing in common: Both states have litigation teeing up that potentially will change the landscape of our Industry. For years, firms like Mortgage Contracting Services (MCS) and other Prime Vendors have simply made multi-million dollar settlements and swept the damages onto their debit columns. The Vinson v MCS, et al. decision is a great example. While Jones Day, who represented MCS makes it look like a simple dismissal, the settlement costs — to lawyers and Mr. Vinson himself — tell the real story. These columns were then funded from chargebacks and fluffed bids to the US government and financial institutions which were outsourced for pennies on the dollar. We discussed this and the new firms being targeted on our FireWire quarterly call, last week. The lawyers involved seem to be keen to the institutional backing of the firms targeted as the companies themselves have shallow pockets. One lawyer put it like this,
When you wholly own a subsidiary, you are responsible for more than simply scooping off the profit. And whether you are publicly traded or a private shop, it really doesn’t matter when it comes to the SEC or DoJ or the Labor Department. I mean take Theranos if you need a good and recent benchmark.
As opposed to the low ball settlement — in the millions of dollars — that came about in the Vinson v MCS, et al. suit, these firms are out for blood. In fact, for the first time in over a decade, the term antitrust came up when it applied to the pricing in our Industry. And as one law firm is an international firm, these will be fireworks to watch while drinking the Scotch.
The reality is that the hypnotic rhetoric which has been emitted from these National Association of Mortgage Field Services (NAMFS) supporters has compelled Labor to lay down, like obedient dogs, for far too long. The nearly identical master services agreements (MSA), all regurgitated by order mills and Prime Vendors alike, have finally run their course. There is no amount of signatures, initials, or blood that may alleviate the legal due diligence required of a public or private hedge fund or multi-national conglomerate.
What I will say on the matter is that at least these folks didn’t buy into the far flung Stalinist duty to work, as opposed to the right to work which has been the siren’s call over the past two decades. For those of you familiar with the cases we discussed on the last call, I appreciate your continued support for Foreclosurepedia which gives us the ability to bring these types of stories to those who matter the most.
