In an overwhelming turnout for last night’s video conference, Guild Members opted out of participation in the HUD 3.6 Contract awarded to PKMG. The unanimous contention was that PKMG, even though being awarded multi billion dollar deals from HUD, were going to force Contractors to wait in upwards of 70 days for pay on Invoicing.
The Guild, in and of itself, does not instruct Members on what they should or should not do with respect to contracting. What the Guild does is educate its Membership. In the instant case, PKMG was recently awarded both the newly created 1S and 6A Regions. After cutting pricing by 65% for Routine Services and 24% on Initial Services, they opted to force Contractors to hold Invoicing for 35 days and then allow for an additional 30 day maximum to send checks. That’s right, snail mail checks in the 21st Century. Tack another 5 days on the timeline provided the check doesn’t get lost in the mail!
Foreclosurepedia has been at the forefront of this situation attempting to raise objections to the Atlanta HUD POC Craig Karnes to no avail. While Karnes has been both professional and courteous, the reality is that HUDs proverbial arms are tied. As there is no Doctrine of Privity in play, the Prime Contractor (PKMG) is allowed to do as they see fit. In the instant case their actions will ensure the movement into a pre-conveyance model for hundreds of seasoned Contractors across the Nation.
Foreclosurepedia had spoken with both the Chief Operating Officer and President of PKMG weeks ago and raised the concerns that a model which slashes pricing and forces Contractors to tote the burden of debt would be problematic. We fear, though, it fell upon deaf ears. While both Foreclosurepedia and the Guild support the fair market economy, we are deeply troubled by a new trend looming upon the horizon. We have no doubt, though, that the bottom feeder Order Mills and Craigslist three teeth wonders will prove problematic when HUD performs its first audit.
While we wish PKMG the best in its ongoing endeavors to conquer the HUD industry, we are sad to see the many Contractors whom will have to shift gears and return to the trenches of pre-conveyance.
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