I hate to say it, but 2022 is shaping up to be as bad — if not worse — than 2021 for the Mortgage Field Services Industry. Socialism for National Association of Mortgage Field Services (NAMFS) members and cold, hard capitalism for Labor. I know, I know as many of you have kept the faith about volumes increasing there has been a recent sense of elation with the coming of the New Year right on the heels of the hangover from the excessive Christmas shopping. The problem, though, is that no amount of volume will ever create anything resembling break even or profit without an increase in wages. I mean a recent observation of the nearly $10,000 per year pay raises NAMFS Executive Director Eric Miller pockets bringing his annual salary to over $134,000 a year according to the latest NAMFS IRS tax returns, the reality is why isn’t Miller doing more, FOR LESS?! It is simple mathematics. If a task costs me 99 cents and pays a dollar, no amount of continued tasks will increase the one penny profit margin. And as I have been demonstrating throughout 2021, with inflation on the rise; with supply chains all but broken; and with the pandemic still raging the reality is that without enormous pay raises no amount of volume will matter as there will be no Labor to feed the machine.
I digress. Today, we are going to talk a little bit about some firms in the Mortgage Field Services Industry to keep an eye on in 2022 whether it be good, bad, or ugly. 😉
The Good
So, when I am looking at things I generally want to know one thing in our Industry: How long does it take to get paid? If it is taking more than 7 business days, there is a serious financial problem. What I mean is that they are running a pay when paid scheme. Amongst other things, it generally ensures that you will eventually fight to collect your money which is seized as a chargeback down the road from other monies owed. It could also mean that the firm is not financially solid.
22 Hill — Specific to inspections, they focus in Connecticut and surrounding New England areas. Great pay timelines and full service including commercial inspections.
Accu Check Inspections LLC — Specific to inspections and in the Chicago and multi-county area. Great people, rapid pay times, and zero headaches.
Credible Home Inspections — Specific to inspections, Credible is based out of Ohio with a footprint in dozens of states. Great timelines for pay and substantial volume. They have a great website with a lot of instructional information!
Guardian Asset Management — Currently, the largest holder of US Department of Housing and Urban Development (HUD) Management and Marketing (M&M) Field Service Manager (FSM) contracts — FHA post conveyance work. From a financial stress test point-of-view, Guardian is strong as they are owned by New Residential Investment Corp. Their timelines in pay need to dramatically improve; however, senior staff state it may occur in Q1FY2022.
National Maintenance Brokers LLC — A 3rd party provider of maintenance, renovation and turns of institutional owners and managers throughout the US. Foreclosurepedia has dealt with NMB for over a decade now. They are a great firm and while not in the Industry, they service many of the assets we do in addition to private label portfolios.
ServiceLink — Many in the Foreclosurepedia Nation may remember them as LPS. To that point, the most impressive part of their operations is that most payments are in 5 business days — that is not a typo. And while their built in software, which was originally built around Wells Fargo, is cumbersome today most people use PPW to parse the work orders. Most bids submitted which conform to Industry standards, are accepted without issue.
Spectrum — Alan Bunker and his Team have had an incredible run for several decades now. Pay and timelines are commensurate with Industry standards.
Stiles Property Management — In conjunction with Stiles General Contractors, they are a firm specific to Texas and New Mexico. Timelines for pay are great and to that point, in addition to simply property preservation and inspections, they are directly involved in US government and Department of Defense contracts.
The Real Estate Solutions Group — Specific to inspections, they tend to pay more than most of their competitors and have a liberal extension of time. They only perform inspections.
ZVN Properties — ZVN is a regionally based out of Ohio. The run the gambit of services and from all accounts they are a good firm to work with. Minimal chargebacks and usually the ability to cure them and get extensions.
The Bad And The Ugly
When Foreclosurepedia looks at bad actors, generally they are at high risk for issuing spurious chargebacks and have horrible timelines for pay. While there is not much that separates them from The Ugly, many people simply chock up the losses as the cost of doing business.
Five Brothers — I thought long and hard about where to put 5B on the list. On the one hand, they have a lot of bid work and on the other hand fighting chargebacks are a right of passage with them — on virtually every big ticket order. If you are comfortable with fighting chargebacks and waiving your right to lien before you ever start the work, they may be a good fit for you.
Mortgage Contracting Services — MCS appears to be in a better financial footing since their default on their interest payments last year due to their purchase by Littlejohn, an investment boutique based out of Connecticut. With that said, the enormity of C Level personnel forces extreme financial pressure on pricing when it comes to Labor. Additionally, MCS has a pattern of going back years to find chargebacks — in some cases nearly five years. Timelines for pay are not on par with other firms and finally, MCS is simply not Labor friendly when it comes to interactions we reviewed with Vendor Managers there.
MSI — MSI is one of the worst when it comes to getting paid or dealing with chargebacks and overall insanity. Some people wait months to get paid and then only get paid when they threaten to quit. They are a firm to avoid like the plague.
Safeguard Properties — SGP has had a love – hate relationship in the Industry ever since Robert Klein, SGP founder and now deceased, formed the Ohio based company. On the one hand, I have some Clients whom absolutely love SGP. Many of them make millions a year and simply chock up the chargebacks to the cost of doing business. The hallmark of SGP is their recent Homeowner’s Insurance Policy Inspection consisting of all aspects of the home pays $3 each. If you are into inordinate amounts of photos, a phone app that is prone to collapse and lose your data, and fighting chargebacks like mosquitoes, SGP is probably a good bet.
Of Note And Mention
I generally put notes in here about some of the up and coming firms on my radar. It is a melange of software, firms, and
CredPro — While no one wants to talk about COVID vaccinations, the are already being required under federal law and by many private companies. CredPro handles the reporting requirements for less than $15 a year. Moreover, though, they provide a full suite of HR including Master Service Agreement storage, insurance verification, background checks, and a lot more.
Cyprexx — At the time or writing, their website was not accessible. Normally I wouldn’t write much about them; however, with their recent acquisition of Xome, I am beginning to hear some horror stories. Many contractors are reporting that with onboarding as a former Xome contractor comes loss of previous levels of work. With that said, I haven’t heard of many recent horror stories with them and if they have the capital to buy out a competitor, it is obvious that they have access to volume.
United Field Services — I have been speaking with quite a few contractors whom work with UFS and they seem to be pleased with respect to pay and the lack of hassle. My understanding is that UFS is a regional firm and to date I have had no complaints issued.
In Conclusion
The reality is that there are far more companies than those we listed. A2Z Field Services and Cityside come to mind as I worked for both of them; however, I have relatively limited information on their performance today. 2022 is going to be a dangerous year to work for anyone. The reality is that it has been over 30 years since any pay raises have been implemented and many firms are still 45 – 60 days out in pay. Volume does not equate to profit. And in a time of pandemic, the stakes are even higher! The vast majority of the outfits whom are going to reach out to you are new which makes them blue skyers. Labor needs to pay close attention to the Master Services Agreements they sign as well as pushing back on a constant state of Rush work orders. Moreover, though, when bids are returned with a statement similar to Bid Readjusted By HUD, Labor needs to demand on seeing the actual document. The reason I say this is because HUD has never adjusted a bid — Simply call HUD and ask them!
The reality is that the Mortgage Field Services Industry has become a bottom of the barrel circus which churns Labor in and spits it out. You need to make sure that whatever company you are working with, at minimum, has a decent DUNS credit rating, is legally a corporation registered to do business in the state they are hiring in, and are paying in a timely fashion. As volumes increase this year, the expectation of fraud multiplies so having a lawyer on hand is never a bad idea. If you need assistance properly vetting a company or increasing your work load, we have some options below.
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