As Industry Bigwigs Whine About FHA Maybe They Should Focus On Pay

The Fraud Pales In Comparison To Employee Misclassification Ongoing

At the peak of the 2008 crisis, Federal Housing Administration (FHA) loans came in at a whopping fifty percent of the market share. Since then and since Jamie Dimon’s Earnings Call scrapping FHA risk, FHA loans account for roughly 19% of the space today. Ironically, though, less than a week ago, Dimon was looking to get back on board provided that he could do whatever he wanted, whenever he wanted. Well, kinda. Now, I am not going to get into the felony convictions JPMorgan has, as a bank, nor how the CEO of Wells Fargo, John Stumph, was recently banned from all banking activities for life. What I want to talk to you about are the whining harlots of the Mortgage Field Services Industry meeting to demand that Labor continues to take it up the ass while simultaneously they continue enriching themselves.

Cheryl Merchant, Freedom Mortgage, Ryan McDoulett, ISN Corp., Jim Vaca, Altisource, and Toby White, of Flagstar Bank are all getting around the DSNews campfire on the 18th of February. On the whiteboard will be ways in which to press their FHA liability — ways to press their core business — down upon the shoulders of Labor. And if anyone believes this will end up well, I have a California Preservation firm I will sell you tomorrow!

I have lost count of how many LinkedIn articles I have read lately about the need to buckle down and start getting work in on time, under price, and doing it NOW. They usually start off with, FHA — or some such entity — is cracking down on lack of reporting on time and you will be executed at the stake with the costs assessed to your family members. Yeah, ok. Let me tell you what really, really motivates me to bust my ass for someone I have never met — it certainly is not some asshole a thousand miles away screaming about $3 dollar inspections! And as we demonstrated, with respect to Five Brothers’ recent statements about how the US Department of Housing and Urban Development (HUD) was demanding five day turn times and Labor would be held accountable for ANYTHING WRONG WITH THE PROPERTY IF DEADLINE WAS MISSED, bullshit Memos is certainly not going to make me care much more. In the case of Five Brothers, their Memo was the epitome of bullshit! Here is how a Senior Official at HUD replied,

I’ve confirmed with HUD OCPO staff that there haven’t been any modifications/changes issued on the existing FHA REO M&M Contracts relative to the initial securing time frame.  The PWS allows for a total of 7 calendar days to perform all initial services, which would include the initial securing.  While it is true that HUD can and does in some instances issue chargebacks to the FSM prime contractors when initial services are not performed timely and damages are incurred as a result of negligence, there is no blanket policy that I’m aware of that would automatically require a chargeback.  Additionally, our FSM prime contractors are only assessed liquidated damages in the event that properties are identified as being in a “Ready to Show” condition prematurely, and HUD obtains inspection evidence to the contrary.

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In the recent tens of thousands of dollars in fraud committed by RSB Field Services — also known as Ball Field Services — the Industry began to scramble. Fact of the matter is that when firms like M&T Bank purposefully refuse to verify downhill whom is paying who, the reality is that what few people remaining in this cesspool of an Industry decide to pick up their toys and go home. And that is precisely it. Unlike years ago where Labor had enormous stakes in the outcome of getting paid based upon the voluminous amount of work they were performing, today there isn’t jack shit out there.

M&T Bank’s leveraging of Nations Property Services (NPS), Mortgage Specialist International (MSI) and others brings them into the spotlight for the first time. Over the past several weeks, Labor has attempted to collect upon monies paid out by All The Usual Suspects to RSB Field Services and all to no avail. And mind you, while M&T Bank is new to our radar, the list of other firms is long and distinguished.

What is most interesting is the fact that a Rhode Island property preservation firm owner was just sentenced to eight years in prison for a $10 Million Ponzi scheme. Now, granted this case was more about the swindling of investor’s capital, the fact remains that there isn’t much difference between that type of Ponzi scheme and swindling people out of money whom perform the work itself. It is the epitome of madness. In a time when the Industry can least afford another tidal wave of fraud, here it comes. And while the outright fraud may appear to be the story, the reality is we are seeing merely the tip of the iceberg.

On Valentine’s Day, yet another ruling came out of California wherein a Judge ordered gig economy firm Instacart to stop classifying their workers as independent contractors. Moreover, though, portions of California Assembly Bill 5, which codified the Dynamex decision, restricts the binding of workers to mandatory arbitration.

There is no way in which National Association of Mortgage Field Services (NAMFS) members are able to pass the second prong of the ABC Test. Under the B part of the ABC test, Field Service Technicians ARE PRECISELY part of the company’s core business. In fact, if Field Service Technicians did not perform field service work, there is not a single NAMFS member whom could operate in the Industry. Foreclosurepedia submits further, though, that NAMFS itself, as a trade organization, has been instrumental in the furtherance of this misclassification scheme. That statement should not be surprising being that NAMFS has refused to obey federal law and release their non profit tax returns.

Uber and Lyft just sustained death blows when their preliminary injunction against AB5 were denied. In that case, Judge Gee also stated she did not see any clear path forward for continuing to classify drivers as independent contractors. The purposeful misclassification of Field Service Technicians will be on the radar for 2020. And Foreclosurepedia has begun to amass a list of those firms recruiting in California. Moreover, though, it is the soft underbelly wherein state governments will be able to express their displeasure for the massive cuts in funding which the Trump Administration are promulgating. The question which presents is whether or not any California workers will have a pair and partner up with their colleagues currently working with the International Association of Field Service Technicians (IAFST) to create a Union Charter.

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