Fun Fact: If you are doing inspections for less than $20 and initial grass cuts under $250, I am not your Consultant. That said, as I am not taking on a lot of new Clients unless they meet certain metrics, pricing is already dropping since the Mortgage Contracting Services (MCS) purchase of Five Brothers. It should come as no surprise based upon the bottom dollar price paid for them. Adding fuel to the fire, though, GIS Field Services has begun taking over all of the inspections and are offering $7 or so in a take it or leave it offer to Labor. The sad but salient fact is that the best analysis of whether or not they will be paid is the trusty Magic 8 Ball. One thing is guaranteed, when pricing drops, the chargebacks are not far behind. And when you look at the image below, reflecting the price hicks from Fannie Mae, Freddie Mac, and HUD, you know it is a race to the bottom.
The easiest way to cut through the bullshit when a Prime Vendor tells you that they do not get any of the increased pricing is this: Conventional: These are the most common mortgages (around 60-70% of the market). They require private mortgage insurance (PMI) if the down payment is less than 20% and have stricter credit score requirements. FHA: While HUD doesn’t directly issue mortgages, it oversees the Federal Housing Administration (FHA) loan program. Backed by the FHA, these loans are easier to qualify for with lower credit scores and down payments (as low as 3.5%). They account for around 15-20% of the market share. VA: Issued by the Department of Veterans Affairs, VA loans are a benefit for veterans and active military personnel with even more relaxed credit score requirements and no down payment needed. They hold a share of around 10-15% of the market. USDA: Guaranteed by the Department of Agriculture, USDA loans are for rural property purchases with income limitations. They represent a smaller segment, around 5% or less of the market.
Now, Fannie Mae and Freddie Mac pick up the vast majority of the Conventional loans and packages them up as Mortgage Backed Securities (MBS). Fannie Mae acquires a significant portion of conforming conventional mortgages. The exact percentage can vary depending on market conditions. Data suggests Fannie Mae’s historical range might be around 60% to 80% of all mortgage originations.
So, mathematically, nearly 90% of all mortgages are covered by the price increases from Fannie Mae, Freddie Mac and HUD. When a Prime Vendor tells you they are not being paid the prices reported for Fannie Mae here, Freddie Mac above and here, and FHA – HUD here, the are outright lying to you. Period. Drop the mic. And as the Prime Vendors continue to lie to you, chances are pretty good you will end up like Labor working for MSI whom are over 90 days late being paid. In fact, Foreclosurepedia recently had to assist an International Association of Field Service Technicians (IAFST) Member in getting paid. Look, do the math. 90% of all inspections are paying $30 for exterior and $45 for interior inspections. You are getting, maybe, $8. So, the National Association of Mortgage Field Service (NAMFS) Cartel are taking 73.33% of the pay for exterior inspections and 82.22% for interior inspections. The real story, though is on initial grass cuts! Most folks are paid $35 per grass cut and Freddie Mac, as seen above, pays $525. That is a startling 93.33% profit to the Cartel that Labor is giving up!
Risk aversion needs to be in your vocabulary, starting today, unless you want to end up like Cyprexx, National Field Representatives (NFR), or ZVN Properties, going forward. These firms are bleeding cash like a stuck pig and the reality is that other than for perhaps NFR, there is no exit strategy, other than bankruptcy.
Now, remember, these folks are generally considered to be Regional Order Mills, although, ZVN Properties has been painfully attempting to perform on a Fannie Mae contract in the Midwest. The reality, though, is that when you put a firm such as Cyprexx between you and the Prime Vendor, the reality is that with only 6.67% left over, you are going to give more than half of that to them on a grass cut, alone. Is this really what you want? I mean recently, a couple of dozen illegal aliens were offered the same rate of pay for the same work, and they cussed out the recruiter. It blew up all over Social Media. So, Strike One against NAMFS. Strike Two in that the NAMFS Executive Director, Eric Miller, sold out to Verisk, along with the NAMFS President Matt Zoldowski. To each their own when it comes to Sherman Act antitrust violations. And Strike Three, by and through NAMFS forcing out nearly 75% of all Labor in our Industry according to their own documentation here.
Want a good retirement plan? Sue your provider claiming to be a misclassified employee. They will settle quick. And you know what? You will make FAR MORE MONEY if you sue than you ever would as a Contractor in this Industry.
If you want to get out of the rat race and make real money, you might have a chance if you leave now. The reality is that today there are less than 15,000 Contractors in our Industry regardless of what Mortgage Contracting Services (MCS) claims. Oh, there are piles of Craigslist hacks that have been signed up and then the scabs that Five Brothers brought over, but true Labor whom are competent? Yeah, that number drops significantly. And for actual, bona fide, independent contractors there may be 100 tops with the remainder being misclassified employees. As I have been around longer than most people whom subscribe, in all honesty, over the past 15 years, I might have met 20 actual Contractors. Working for a NAMFS member does not make you an independent contractor. Nearly $40 Million in legal settlements against almost all of the Top 5 Prime Vendors stands as a testament to that.
