Communication is essential no matter what you are doing in life. One of the things absent from the Mortgage Field Services Industry seems to be an honest dialogue with Contractors. The reality is that everyone, by-in-large, are encountering financial problems. Contractors are the direct recipients of National, Regional and Otherwise Unspecified Order Mills egregious spending sprees.
Semantics aside, the situation presented today is that there are many Order Mills whom I have documented on here probably only guilty of being incompetent business owners. This discussion involves them and not those whom would appear to be engaging in criminal activity.
Everyone indulges in excess. That is the only reason we have a Capitalistic Society. The Economic Model is dependent upon Debt. In fact, if there were no debt; if everyone spent responsibly, the Federal Reserve Board vis-a-vis Central Bank would be out of business. This is a static reality which is alien, in concept, to many.
The difference between debt and indenture is that debt is entered into freely and willingly. Indenture, as in an indentured servant, is the binding of one human being to another without choice.
Hindsight is 20/20. To effect change upon a given situation, sometimes a fresh set of eyes are needed to coin a phrase of a colleague of mine. Change is a painful process; I have been through it as I am a recovering alcoholic. While I did not go through treatment or AA, it required that I perform a brutal self examination and a reordering of my priorities. To simply address symptomology is both reckless and ill advised.
Virtually every business encounters liquidity issues. The key to those issues is to prioritize payment. Take property preservation as an example. You really only have several outgoing payments: 1) Your Facility; Your Staff; and 3) Your Contractors – Labor.
The reality is that the PRIORITY MUST BE the payments to your Labor. You DO NOT HIRE NEW CONTRACTORS to continue the Work in hopes that the profit margins on their backs will provide enough of a cushion to pay the Current Contractors. The former statement allows for you to maintain your Volume and not risk negative PR; the latter puts potentially in front of a jury.
The true measure of a Man or Woman; a Leader, is by whether or not the are capable of mending their ways and doing such publicly. Concessions are made all the time between Labor and Management — CONCESSIONS ONLY HAPPEN WHEN MANAGEMENT IS HONEST!
The reason that this process is public is to ensure that Management abides by the Terms of their Agreement. To simply, by fiat, place Contractors on Restructured Re Payment Plans are grounds enough to bring the Consumer Financial Protection Bureau (CFPB) into the mix. In essence, when a Company enters into a Contract, it is covered under most State’s Consumer Protection Laws. When those Contracts deal with Interstate Commerce (e.g.; Real Estate) it falls under the Scope of Federal Law. With that said, CFPB has the ability to greatly impact Order Mills and their wanton disregard for the Rule of Law.
I digress. Let us first examine Michigan, as a random State, for Fraud in the Inducement and Fraud in General,
As a general rule, actionable fraud consists of the following elements: (1) the defendant made a material representation; (2) the representation was false; (3) when the defendant made the representation, the defendant knew that it was false, or made it recklessly, without knowledge of its truth as a positive assertion; (4) the defendant made the representation with the intention that the plaintiff would act upon it; (5) the plaintiff acted in reliance upon it; and (6) the plaintiff suffered damage. Hi-Way Motor Co. v. Int’l Harvester Co., 398 Mich. 330, 336, 247 N.W.2d 813 (1976); Irwin v. Carlton, 369 Mich. 92, 94, 119 N.W.2d 617 (1963); Candler v. Heigho, 208 Mich. 115, 121, 175 N.W. 141 (1919); see also Arim v. General Motors Corp., 206 Mich.App. 178, 195, 520 N.W.2d 695 (1994).
A claim of innocent misrepresentation is shown if a party detrimentally relies upon a false representation in such a manner that the injury suffered by that party inures to the benefit of the party who made the representation. United States Fidelity & Guaranty Co. v. Black, 412 Mich. 99, 118, 313 N.W.2d 77 (1981). The innocent misrepresentation rule represents a species of fraudulent misrepresentation but has, as its distinguished characteristics, the elimination of the need to prove a fraudulent purpose or an intent on the part of the defendant that the misrepresentation be acted upon by the plaintiff, and has, as added elements, the necessity that it be shown that an unintendedly false representation was made in connection with the making of a contract and that the injury suffered as a consequence of the misrepresentation inure to the benefit of the party making the misrepresentation. Id. at 118, 313 N.W.2d 77. Thus, the party alleging innocent misrepresentation is not required to prove that the party making the misrepresentation intended to deceive or that the other party knew the representation was false. Id. at 117, 313 N.W.2d 77. Finally, in order to prevail on an innocent misrepresentation claim, a plaintiff must also show that the plaintiff and defendant were in privity of contract. Id. at 118-119, 313 N.W.2d 77.
“Silent fraud,” also known as fraud by nondisclosure or fraudulent concealment, is a commonly asserted, but frequently misunderstood, doctrine. This is primarily because most fraud claims are based upon alleged affirmatively stated false representations of material fact. A claim of “silent fraud” requires a plaintiff to set forth a more complex set of proofs. In Lorenzo v. Noel, 206 Mich.App. 682, 684-685, 522 N.W.2d 724 (1994), this Court gave the following explanation of the so-called “silent fraud” doctrine: “ ‘ “A fraud arising from the suppression of the truth is as prejudicial as that which springs from the assertion of a falsehood, and courts have not hesitated to sustain recoveries where the truth has been suppressed with the intent to defraud.” ’ Williams v. Benson, 3 Mich.App. 9, 18-19, 141 N.W.2d 650 (1966), quoting Tompkins v. Hollister, 60 Mich. 470, 483, 27 N.W. 651 (1886). Thus, ‘the suppression of a material fact, which a party in good faith is duty-bound to disclose, is equivalent to a false representation and will support an action in fraud.’ Williams at 19, 141 N.W.2d 650.”
FRAUD occurs when all of the following elements exist:
- an individual or an organization intentionally makes an untrue representation about an important fact or event;
- the untrue representation is believed by the victim (the person or organization to whom the representation has been made);
- the victim relies upon and acts upon the untrue representation;
- the victim suffers loss of money and/or property as a result of relying upon and acting upon the untrue representation.
Fraud can be for the benefit and gain of an individual, or for the benefit and gain of an organizational entity or program. When an individual commits fraud, the benefits and gains may be direct (receipt of money or property), or indirect (reward of promotions, bonuses, power and influence). When an organization (actually an employee acting on behalf of the organization) commits fraud, the benefits and gains to the organization are usually direct, in the form of financial gain. In addition, under U.S. federal Law, anyone who engages in fraudulent activity and uses telephones, telegraph and/or the Postal Service to discuss or either send or receive correspondence or documents in furtherance of the fraud, can be prosecuted for felony mail fraud and/or wire fraud; and if two or more persons act in collusion to defraud, U.S. federal conspiracy statutes also apply.
Why is it then, that after an Order Mill enters into a Legally Binding Contract that the Order Mill then does not pay within the time parameters established? I mean, the law would seem to be quite clear. What is additionally quite clear to me is that when Portfolio Holders know about Fraud, they to are liable along with their Insulating Order Mill. I believe that is the one thing we all learned in the Sub Prime Crisis anyway.
Herein lies the crux of the law: Unless a victim presents his or herself to the judiciary, there is no actionable case. That simple. So, for thousands of years scholars took great pains to create a beautiful tapestry we all refer to as the Law. The Law allows for people; common men and women, to bring their issues to be heard and most of the time resolved. The only excuse that Contractors whom are being screwed have not to file is laziness.
So, going forward, we are going to concentrate on more of a Self Help aspect. Foreclosurepedia is going to continue to openly support those whom function under the Rule of Law; however, our days of advocating upon behalf of singular Contractors has drawn to a close.