As predicted by Foreclosurepedia, Mortgage Contracting Services (MCS), a suite of Mortgage Field Services under the banner of ASP MCS Acquisition Corporation, defaulted on their interest payments as reported by Moody’s. ASP MCS Acquisition Corp. was formed by American Securities LLC to facilitate its acquisition of MCS Group Subholdings, LLC (“MCS”). MCS provides property inspection, appraisal and preservation services on behalf of lenders and loan servicers for homes with defaulted mortgage loans.
MCS is in a long line of National Association of Mortgage Field Services (NAMFS) members whom have turned their backs on debts owed and now doing such in the middle of a Global Pandemic while demanding that their misclassified employees continue to work for pennies on the dollar in strategic hotspots under violent and dangerous conditions.
MCS’s immediate clients include numerous bank and nonbank servicers of residential mortgage loans, including Wells Fargo, Chase, and PennyMac. Foreclosurepedia has reported extensively upon MCS being leveraged to the hilt at nearly half a billion dollars and their inability to pay it. Headquartered in Lewisville, Texas, ASP MCS Acquisition Corp., primarily provides property inspection and preservation services on behalf of lenders and loan servers for homes with defaulted mortgage loans. The company is owned by affiliates of American Securities LLC, a private equity group.
The Ca-PD/LD designation follows ASP’s failure to make the interest payment on June 15, 2020 required under its senior secured first lien term loan. ASP subsequently entered into a forbearance agreement with its first lien lenders.
ASP’s liquidity profile is weak due to low profitability and ongoing negative free cash flow. At December 31, 2019, ASP had $5.5 million in cash and full availability under its $35 million revolving credit facility. However, any borrowing under the revolver would be limited to 30% as Moody’s does not believe the company would be in compliance with the springing leverage covenant of 6.95x.
SP MCS Acquisitions Corp’s Ca CFR reflects elevated leverage, weak liquidity and profitability, and the lack of free cash flow generation. While the company does not have any near-term maturities, we view its capital structure as untenable.
With roughly $5.5 Million in the bank and a roughly $30 Million a year interest payment, there isn’t much hope on the horizon through the middle of next year taking into consideration all of the moratoriums currently in place. To put it in layman’s terms, any members of Labor counting on payments for Christmas presents had best calculate the alleged computer glitches and outright chargebacks coming down the line to ensure bonuses are paid to MCS’ C Level personnel.
Get out while you still can! Refuse to continue being a victim and just another NAMFS statistic. More to the point, join with your fellow members of Labor within the International Association of Field Service Technicians (IAFST) whom work day in and day out with Foreclosurepedia to protect the interests of Labor and their families!