Scott Wolfe is the CEO of Wolfe Law and founder of zlien.com, a resource that helps contractors receive payment and manage financial risk. An attorney in six states, Scott is also the author of The Lien and Credit Journal, which zeros in on credit management. You can connect with him via Twitter, LinkedIn and Google+.
My main interests in Wolfe revolve around zlien. I reached out to him, this evening, as one of the biggest problems Contractors face in the Mortgage Field Services Industry is a DEMAND to waive their legal rights to lien! Liens have been filed here in the United States for over 200 years. By fiat, outfits like Safeguard Properties, have wiped out this ability with the stroke of a pen.
Now, I am sure this will generate yet another round of threats of litigation from the Freshman Lawyers Guild. I stand ready. Here is the reality: Absolute Waiver of Lien borders upon the illegal and is definitely insane. Conditional Waiver of Lien is a different creature.
First, many states or lawyers have crafted a “conditional lien waiver” document. This document looks like a lien waiver, but is “conditioned upon” actual receipt of payment. In states that regulate the lien waiver’s language, these conditional releases are safe to sign. In other states, however, be careful that the waiver is actually “conditional.”
Lien waiver language falls into one of two categories: (i) states that have restricted language; and (ii) states that do not. Some states, like California and Texas, mandate that all lien waivers read exactly the same. If you’re in one of these states, the lien waiver game is a lot easier. Either the language is what the statute requires, or the lien waiver isn’t worth the paper it’s printed on.
The aforementioned two paragraphs come from Wolfe’s Article in MutliBrief entitled Should You Sign That Lien Waiver? I am positive that my detractors over on the Drive By Social Media are going to state that, “Yeah, but you don’t have to sign anything, just don’t work.” Without going into the legalese as most of these folks didn’t even understand the recent Request For Qualifications nor that it was the precursor to a Request For Bid, the reality is that if the National, Regional and Otherwise Unspecified Order Mills were legitimate they would request a Conditional Waiver of Lien be signed.
So, let’s talk about that for a moment. If there is no mens rea; if mea culpa is non existent, then what is the harm in a Conditional Waiver of Lien? It covers the Financial Institutions, the Portfolio Holders and the US Government UNLESS THE NATIONAL, REGIONAL OR OTHERWISE UNSPECIFIED ORDER MILL DECIDES TO DEFRAUD A CONTRACTOR!
Let me tell you why that the Lien Waiver issue will be hard to change. There are far too many folks on the Drive By Social Media whom will cow tow to their Order Mill friends. To clarify a bit, if the term Order Mill; a term I invented and is now part of the Industry Vocabulary, was not a true and accurate depiction of what is going on, no one would be using it.
The reality is that a good portion of the Order Mills are under financial constraints. I personally believe many border upon insolvency if they actually paid their Contractors as opposed to setting up payment plans. I challenge any I have mentioned before to produce their books for public inspection for the time periods I reported upon.
For the Mortgage Field Services Industry to show good faith to Contractors Absolute Lien Waivers must be modified to reflect Conditional Lien Waivers. The reality is that while the same names continue to pop up on the radar, I give you my word these folks will fight the hardest to keep Conditional Lien Waivers out.
Below is an example of what happens to folks whom Waive Liens blindly. It comes from Wolfe’s aforementioned Article.
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