Saturday, February 27, 2021
This entry is part 27 of 31 in the series Labor Initiatives
Home #BlackLivesMatter How NAMFS and Financial Institutions Are Running Afoul Of Public Adjuster Laws

How NAMFS and Financial Institutions Are Running Afoul Of Public Adjuster Laws

This entry is part 27 of 31 in the series Labor Initiatives

When the National Association of Mortgage Field Services (NAMFS) began to leverage the Mortgage Field Services Industry in 2003, the reality was that complying with the myriad of laws, rules, and regulations of both the state and federal government were the last thing on their mind. At the time, the only guide available was from the US Department of Housing and Urban Development (HUD) in the form of the Mortgagee Letter (ML). In essence, it was the Field Service Technician’s Bible. For 30 years, broken doors and windows were secured using plywood and a compression system of 2×4’s and carriage bolts. And while HUD pretended to require compliance with the Service Contract Act (SCA), there is no way in hell that those prices are calculated in the ML Reimbursable list in accordance with SCA. Mandatory discounting runs afoul of the Copeland Act, but only lip service is paid and even then only under duress. And as the 2008 mortgage crisis hit, NAMFS Members became preoccupied with constructing a pipeline which addressed quantity instead of quality. Under both the Bush and Obama Administrations, concerns with Compliance were overshadowed by quid quo pro; moving assets through the pipeline and maximizing profits, to the detriment of the community. By way of comparison, the Trump Administration, though, appears to be fixated upon both Compliance and Regulation. And it is that Compliance, coming both from state and federal regulators, that should have NAMFS Members, extremely concerned.

The Mortgage Field Services Industry has never rewarded innovation and quality with a higher price tag. In fact, cost hikes have always resulted in loss of Contracts for Labor. More importantly, I have NEVER seen a price increase given to Minority Females and Labor! It reinforces statements by Matt Martin, CEO and Founder of Chronos Solutions, whom recently bragged, on LinkedIn, about being able to cut the throats of any competition. When Foreclosurepedia confronted Martin, he refused to answer any questions, leaving his cheerleading squad to go down with the USS Social Media.

As the Industry begins to look at compliance, addressing the plethora of state laws is what has NAMFS Members in a bind. For example, back in July, Foreclosurepedia brought to light the fact that the State of Florida is making it a 3rd Degree Felony for performing adjuster related services without proper licensing. Florida House Bill 911, which is set to take effect on 01 January 2018, makes it a third degree felony to participate in insurance claim matters without a public adjuster’s license. That covers ALL FHA INSURED FORECLOSURES. It also covers all hazard claims as well as all damage and storm claims. Here is what a few pertinent parts from Florida HB 911 have to say,

(19) Except as otherwise provided in this chapter, no person, except an attorney at law or a public adjuster, may for money, commission, or any other thing of value, directly or indirectly:

(a) Prepare, complete, or file an insurance claim for an insured or a third party claimant;

(b) Act on behalf of or aid an insured or a third-party claimant in negotiating for or effecting the settlement of a claim for loss or damage covered by an insurance contract;

(c) Advertise for employment as a public adjuster; or

(d) Solicit, investigate, or adjust a claim on behalf of a public adjuster, an insured, or a third-party claimant.

Here, let me give you an example which happens each and every day in this Industry. In fact, simply replace the term homeowner with HUD — and really they are one in the same anyway as HUD is the homeowner — and you have an identical issue in Texas and most of the United States. Bear in mind that the 5th Circuit Court of Appeals agreed,

The Lon Smith Appellants ignore the language of their roof repair contract with the Appellees Gerald and Beatriz Reyelts (“the Reyelts”), which specifically “authorize[d] Lon Smith Roofing and Construction (“LSRC”) to pursue homeowner[’]s best interest for all repairs, at a price agreeable to the insurance company and LSRC.”…The contract further stated that “[t]he final price agreed to between the insurance company and LSRC shall be the final contract price.”…In other words, the repair contract gave the roofer full and final authority to negotiate the repair contract price with the insurer without the insured’s knowledge or approval, in violation of Section 4102.051(a)’s prohibition on unlicensed contractors acting as public adjusters on behalf of insureds.

And I want to get down and dirty, here. This isn’t simply a concern for NAMFS Members whom are Prime Vendors, this is an issue for Field Service Technicians! Here is what Chip Merlin, Esquire, had to say when addressing precisely whom had the legal right to negotiate the Claim,

In virtually every state, parties cannot enter into an illegal contract where the conduct of the contract is criminal. I recently spoke at an IRC conference to many restoration contractors and warned them that while it is proper to explain their pricing and charges for a repair, the negotiation of an insurance claim can only be made by a policyholder, a public adjuster or an attorney.

From the beginning, for those whom take the time to Trust But Verify as President Reagan said, the entire premise of the legality of, at minimum, the FHA 27011 insurance claim, is suspect. This form is that which financial institutions submit to HUD in order to be reimbursed for both services rendered and claims of default upon FHA insured properties. It is, in every aspect of the definition, an insurance claim. Fact of the matter is that under the Trump Administration, instead of focusing upon the creation of new laws, rules, and regulations, Trump is committed to enforcing those which are on the books and getting rid of those which are duplicitous and stifling competitive business. And for all the chatter, like hens in the cage, about compliance, the reality is that it is nothing other than hot air in an echo chamber when we talk about NAMFS.

And yet, ab initio, each and every NAMFS Member whom submits billing to financial institutions, whom, in turn, submit the same to FHA for reimbursement, are guilty of violating a half dozen state and federal laws if those submissions are not done by a licensed insurance adjuster. Moreover, the process, in and of itself, crosses state lines, using electronic means, in the furtherance of artifices and schemes — RICO. It is not as if the vampire squid, which is NAMFS, does not know this. These NAMFS Member firms are extremely articulate, inordinately wealthy, and have more lawyers than Carter has liver pills. What presents is whether or not HUD Secretary Ben Carson has a pair and is willing to bring the Industry into conformance with the law. One would think he would in that the restitution in funds alone from these insurance schemes would more than pay for his nearly $7 Billion in budgetary cuts handed down by the Trump Administration. Even HousingWire published a piece, in March, 2016, spelling out how NAMFS Members are performing insurance claims work for HUD – FHA. Here is the kicker, it appeared to me to be more of a paid advertisement, but it squarely put NAMFS Members on the hook,

The departments responsible for property preservation and property condition must have access and understanding of the insurer’s claim documents, particularly the insurance adjuster’s scope of loss, and be able to communicate what is needed at the property to their field network,” said Patrick Nackley, director of marketing and business development at Superior Home Services.

Secretary Ben Carson is a bull with a nose ring, no doubt. The quintessential token to the Trump Administration’s overwhelmingly white, vulture capitalist Administration which appears to be a Goldman Sachs gangbang. I suppose, at least, Goldman adds the Semite flavor so two checkboxes are ticked off on the, Gee, I’m not a racist, card. Not that anyone is getting all Bannon about it, but the politicos at least have a bone to toss around on Sunday mornings. Truth be told, it really doesn’t matter, as Goldman stands to pocket around $1 Billion in tax savings and Secretary Carson will undoubtedly disassemble any type of meaningful infrastructure which might benefit those in need from simply a malfeasance point of view. The Peter Principle at its finest! And it is this system of smoke and mirrors that Eric Miller, NAMFS Executive Director, relies upon most. Miller, whom is paid over $120,240 per year; Miller’s salary which consumes over SEVENTY FIVE PERCENT of all NAMFS Member dues, is no stranger to the shell game. Look, Miller probably could have continued his dog and pony show had the economy not improved. Ironically, the System failed Miller and NAMFS when they needed it the most. Go no further than Freddie Mac recently letting VRM Mortgage Services (VRM) go based upon volumes remaining! And VRM isn’t alone when it comes to the System failing to protect NAMFS Members, which Miller has always banked on defrauding the US Taxpayer.

Wells Fargo, once a dominant player in the Mortgage Field Services Industry, is now merely a bystander with respect to any meaningful volumes — perhaps 250K at best. And as the Wells Fargo Board of Directors watch their previously stoic empire crumble around them, the reality is that even chargebacks, illegally rolled out by their NAMFS lackeys, will not be enough to save the bottom line. The litany of fraud and abuse, over the past year alone, has the Federal Reserve Board publicly inferring hefty fines. And what little inventory Wells still has shifts from one NAMFS Member to the other, like so many grains of sand falling through the hands of time.

So, why should NAMFS Members begin to feign concern — because they really do not give a shit — over their historical impotence with respect to fraudulently submitting insurance claims? I mean why should NAMFS Regime Members give a second thought to processors spoon fed work orders, like grains of rice, in assembly line fashion, based out of India? Well, let’s start with The American Recovery and Reinvestment Act of 2009. I mean, gee whiz, call me old fashioned, but why is Secretary Carson allowing NAMFS Members to bill at the highest reimbursable levels, when they all, AND I MEAN THEY ALL, utilize foreign nationals in some way, shape, or form when it comes to Prime Vendor Status?! Hell, Altisource, a foreign national, performs HUD work! You see how that smoke and mirrors crept up on you again? Yeah, and how about that pesky term Conduit of Fraud? See, when the financial institution’s Prime Vendors break the law — submitting insurance adjustment claims and then performing the services at the same time — it starts making the HSBC scandal look like a Rotary Club poker game.

Love Trump or hate him, the guy understands money. And make no mistake whatsoever, if he gets wind that Secretary Carson is taking a pass on hundreds of millions of dollars, like HUD Management and Marketing (M&M) Acting Director, Kimberlee Satterfield, is overseeing by her protection of Innotion Enterprises and Purdy Enterprises, that new mansion the Carson’s just bought in Vienna, Virginia, may soon be a HUD reposession. See, that’s how the Beltway works. And maybe, just maybe, it was planned all along! I mean who in the hell let’s their wife take command and control of a Cabinet Level Agency? Secretary Carson may be good at poking around in the dura and whacking out brainstem ganglioma in children, but running an Agency — and here comes the irony — which countless minorities and underprivileged families have come to depend on apparently wasn’t required study in medical school.

The irony of all ironies is that if NAMFS Members obeyed the law, it would actually increase the levels of reimbursement. I mean if Miller and his all white NAMFS Board of Directors would simply focus on addressing the Mortgagee Letter Reimbursables, which have not been updated in, you got it FOREVER, everyone could pay their light bills. You have to give it up, though, for these charlatans. NAMFS Members have spent so much time embedding the fraud in things like chargebacks, mandatory percentage deductions, and misclassification of employees as independent contractors, that they cannot even see the real money, on the table, right in front of them. And to top it all off, this is what the fuck Compliance is all about!

It’s All Aboard the Swamp Train and Secretary Carson — no, make that Carson’s wife — is the engineer. That black hole of bottomless budgetary nihilism, which HUD has become, is getting ready to receive an injection of Compliance from the Swamp Doctor. Either that, or once again, the Carsons will simply become yet another Beltway casualty in the Drive By Media’s 15 second soundbite coverage. Virtually flatline volumes means that even the most hardened of Field Service Technicians, whom cheerlead NAMFS from Facebook land, are soon to become extinct, just like what scraps of respect were left for the HUD M&M Program. And you know what? It makes for great evening drama. Sitting on the sidelines and listening to so many sanctimonious assholes, as I have over the years, really reinforces the simple and salient fact that it was never the financial institutions whom fucked shit so incredibly up. I mean that. Look, the bankers didn’t tell NAMFS how to run their show. In fact, time and again, when you review the litigation in cases like MidFirst Bank v MCS, the bankers, point blank, state that NAMFS Members proffered that they understood all the laws, rules, and regulations. Shit, I have forgotten more about Compliance and the Industry overall, than most of these fucktards will learn in a lifetime! And that is really sad.

So, as we gear up to review yet another NAMFS IRS Form 990 for FY 2016, the reality is that the NAMFS #FraudFest 2017, in Orlando, was the most pathetic in decades. Maybe a couple hundred of the Sad Faced Clowns showed up. They gathered around the bar, like Fear and Loathing in Las Vegas attendees. I mean the only exhibition attendees where those gathered around to ply their — and here it comes — new Compliance tools of the trade. Another smoke and mirrors fiasco brought to you by Eric Miller & Co. And as for the NAMFS giveback? Hell, they couldn’t even muster a baker’s dozen. Not surprising, though. NAMFS Members are predatory, by nature. I am sure that some actuary had already calculated the Return on Investment which would be recouped upon the foreclosure of the very assets they worked upon.

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Paul Williams
Linux addict buried deep in the mountains of East Tennessee.



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