There, we said it. We said the scariest word in the Industry, Demand — or the lack thereof. In fact, the term lack of demand is even more feared than quarterly losses. Moreover, though, it is even more feared, in many circles, than hearing about one’s significant other leaving the relationship. And going into this Holiday Season, the outlook is not simply muted, as most commentators will tell you. The outlook is grim. Without getting into the economics, which only deal with the periphery of the matter, suffice it to say that technology has finally begun what it was designed to do, and with an uneducated workforce incapable of harnessing that technology, the very foundations of the Industry are at risk.
At 0830 EDT, the US CPI is due. And to that point, today tees up House Speaker Johnson’s first key vote demonstrating whether or not a laddered CR can make its way not only to stop the downgrading of credit of the US, but prevent yet another potential government shutdown.
When we speak of Demand, we need to first plumb the depths of the Industry to fully understand what the existential crisis truly is. For years, our Industry has operated from the point of view that it is the be all end all when it comes to distressed assets. To a point, the Mortgage Field Services Industry still remains dominant — but only to a small point. The ability to retain Labor is now gone within this Industry. There has been a marked rise in the recruiting within the former, fraud prone channels such as Craigslist and other channels such as Indeed simply have not panned out. Part of this has been because the dramatic price increases realized through Fannie Mae and Freddie Mac were marked down as profit and never made their way to Labor. Second, in order to retain talent at the administrative level, Vendor Managers began receiving larger bonuses cut out of the price increases — read that as yet more loss to Labor. In every other industry in the US, wage growth has been both dramatic and sustained. Yet, in our Industry, it has been the only one to actually see a drop in pricing.
To put this into perspective, I did a takeoff for the pricing of our Industry versus the shoveling of manure out of horse stalls at Churchill Downs. In full disclosure, my great uncle is still a lawyer involved in the racing industry. To that point, the shoveling of manure there, over the past 18 months, has risen by 318%. Ditto for roughly any farm in the Kentucky – Tennessee region. And in our Industry, pricing has fallen by roughly 17%.
You cannot continue to be paid $30 for an exterior inspection and $45 for an interior inspection and only pay Labor $5 by the time the pricing hits the boots on the ground. And you cannot be paid $425 for an initial grass cut of 10K ft2 or less and only pay $35 for that grass cut and expect to be a magnet of Labor. Even the recent attempts of GIS Field Services and others to deploy illegal aliens in sanctuary cities has miserably failed and that is a testament to the problems in our Industry.
The reality is that it is far easier to get an inspection done through, say, ProxyPics, than it is in this Industry. The quality is higher and the rate of pay is dramatically increased for Labor. I am not paid a penny by ProxyPics, but the reality is that Luke and his Team have a great product. And Luke’s vision of the Inspections Industry is the ultimate reason why our Industry will soon lose most of the Demand, if you will, that still exists.
The reality is that our Industry has refused to invest in itself — I am not talking about the new boats for the owners or junket trips to NAMFS conferences here. If you want to justify raising prices, push education to Labor and your Client’s, in turn, will pay more as it removes liability from the Servicer. One of the biggest question marks is whether or not this Industry will take the position that Labor matters. It will throw a lot of cold water on the thesis that Labor are human being if, in fact, Management begins to understand that by Q2 of FY 2024, there will be a rapidly climbing increase, cumulative in nature. By way of example, three of my Clients extended out their Consulting Agreements with me through the end of 2024. That says a lot. It says that they have looked into the same crystal ball as myself and realized that the institutional setting is here and that the re-acceleration of distressed assets will continue after the holiday hiatus that is taken, every year. It also speaks volumes, when combined with the implementation of artificial intelligence, that I have brought over from my paying nonprofit clients, whom have realized historic grants and donations.
In closing, I have this to say to many of you whom constantly and consistently request all manner of assistance for free. I work for a living, just like you. I have bills, just like you. I was THERE where you are and long BEFORE you! I invested in myself and my product. What I did not do is DILUTE my product. So, when you tell me that you have a problem getting paid and I research that I published on that firm, well in advance, chances are I won’t help you for free. If you want a website for free and I am already offering you two free years of hosting, chances are I won’t help you. And finally, if you have been reading my Newsletter for years and yet have not donated a single penny, chances are I probably won’t reply for help requested for FREE.
