Reverse Mortgage Solutions (RMS), a subsidiary of Ditech Holding Corporation, has filed for Chapter 11 Bankruptcy protection. It is RMS’ first and Ditech’s second in 14 months. RMS is an enormous contributor to National Association of Mortgage Field Services (NAMFS) members by and through work orders within the Mortgage Field Services Industry. Normally paying within seven days, many are extremely concerned that the mandatory shedding of debt will include monies owed and potentially future monies for any services provided. NAMFS Executive Director Eric Miller and NAMFS President Justis Smith have both remained silent on the matter — and for good cause. In light of the bankruptcies and closures during 2018 and now the recent inability to pay by MSI and Primestar, NAMFS has become the poster child of why financial institutions and government sponsored enterprises are looking for access to Labor directly.
Foreclosurepedia reached out to sources within the US Department of Housing and Urban Development (HUD) whom had this to say,
In regards to RMS, the Chapter 11 filing would show up on the D&B report for financial health (prime contracts) and would serve as a black flag not only in HUD but Governmentwide for purposes of responsibility. On the pre-conveyance side, I have a feeling it will be both their current reputation as well inability to pay subcontractors that will keep them from doing work for the FHA Lenders.
Even more serious, though, are the implications for the National Field Network (NFN) Involuntary Bankruptcy. Fact of the matter is that many of the suspected Ditech bridge gap loans to MSI, Primestar, and others were underwritten by Ditech. Those are in peril as well as potential payments to the 200+ NFN Creditors should the alleged RMS debt to NFN be forgiven. Claims by Shari Nott, NFN’s CEO, claim millions owed by RMS to NFN. Foreclosurepedia predicted that 2019 would be the end of the massive National Order Mills and that financial institutions and portfolio holders would begin a move back to Labor directly. When dealing with RMS, the position of HUD and the US government is guided by Federal Acquisition Regulations (FAR) and a myriad of other federal laws, rules, and regulations. Emphasizing the seriousness of the matter, here is what the RMS Website is currently displaying,
Building up that, here is what RMS President, Jeff Baker, had to say with respect to the inability to cash checks and how RMS would make sure it was all made right,
We will stay on top of this fast breaking issue including our discussions with the International Association of Field Service Technicians (IAFST) whom are currently working with entities marshaling to absorb the RMS portfolio as well as the FHA space with respect to servicing and origination.