I have been an avid reader of zlien‘s plethora of material and their Construction Finance Journal for some time now. Scott Wolfe heads up zlien and along with Nate Budde and the rest of the kick ass staff at zlien, any Contractor in the Mortgage Field Services Industry whom DOES NOT subscribe to zlien’s material does such at their own peril. More on point, though, zlien offers a tremendous amount of material for free! To give you a taste of what Wolfe’s crew puts out, take a read what attorney Nate Budde wrote about conditional and unconditional lien waivers in his article, “Court Saves Material Supplier from Lien Waiver Mismanagement“:
A conditional waiver still waives the lien right (like the higher party wants) but does so only upon the actual receipt of the payment owed. This makes too much sense to be as big a sticking point as it appears to be in this industry. Providing an unconditional waiver prior to receiving payment is poor receivables management, it throws away having a secured position on the project for nothing. A conditional waiver, on the other hand, does not affect the right to lien (and thus does not affect the claimant’s secured position) until payment has been made. And at that point, the lien right is unnecessary.
The aforementioned quote above, from Budde, is the epitome of that which we are dealing with today in the Industry. There is not a SINGLE INDUSTRY CONTRACT which does not extract an Unconditional Waiver of Lien BEFORE any work or payment occurs! It is the bedrock upon which so much of the fraud I have reported upon originates from. In fact, without Doctrine of Privity extending between the Subcontractor to the Prime Vendor, the reality is that it creates a Ponzi Scheme with labor supplanting money in my opinion. Drilling down a bit, in Foreclosurepedia’s #OpBerghorst wherein we forced the bankruptcy of Berghorst Enterprises which was owned and operated by the now disgraced and former Heather Berghorst, National Association of Mortgage Field Services (NAMFS) Secretary, the Conditional Waiver of Lien would have protected the Subcontractor. While many argue that once bankruptcy is filed unsecured claims are virtually impossible to pursue, Foreclosurepedia proved that theory to be substantially untrue in the Mortgage Field Services Industry. Our rationale was and continues to be that the vast majority of the NAMFS Offender Members have organized themselves as an artifice from which profits — including monies owed to Contractors — are preordained to be siphoned off.
Foreclosurepedia postulated the legal principles upon which the embezzlement, larceny and fraud along with thewillful and malicious injury claims challenging the Berghorst’s bankruptcy in US Bankruptcy Court, Western District of Michigan, Southern Division are being pursued by both Contractors and Fifth Third Bankcorp.
Foreclosurepedia, while not giving legal advice and not being Counsel, has oft believed that the run-of-the-mill state lien laws and Uniform Commercial Code (UCC) do not take into consideration the netherworld of the Mortgage Field Services Industry. First, the Order Mills within the Industry cross state lines using both electronic means and US Mail without proper licensing. This, in and of itself, poses jurisdictional quandaries. NAMFS has been loathe to openly address the illegal activity of its Membership while ironically documenting its Member’s multi state presence.
First and foremost, my working theory is that the Unconditional Waiver of Lien is rendered null and void, ab initio, in cases wherein Contractors are not paid. The rationale is that if the work has been performed then the only reason that the reason the Order Mill does not pay within the Scope of Time retroactively demonstrates the fact that the Order Mill entered into the Contract with the intent to commit fraud. Additionally, as the Order Mill DOES NOT own the properties upon which Services are performed upon, they have no legal standing to challenge the lien. Period. The former is well formed in law and the latter is purely a Standing and Jurisdictional matter. While proving mens rea is a difficult creature, the reality is that it is easily demonstrated that the modus operandi of the Mortgage Field Services Industry with specificity to NAMFS Members is well documented. The patterns and practices all of the Offender Members have followed are as if a Play Book has been issued out to them. I believe that as a part of Discovery, all internal Memorandum, documents and Minutes would shed light on this subject. In totality, I stand firmly behind my opinion that at best we have interstate collusion wherein two or more people have gathered to orchestrate a pattern and practice of a Ponzi Scheme and at worst we are probably witnessing the most heinous example of Sherman Act Violations since Standard Oil.
While zlien may or may not agree with my accounting of the Industry, what I can tell you is that THEY ARE THE BEST at what they do which is dealing with Liens. I don’t make a dime from these guys; zlien is simply a Firm that I performed the Due Diligence that the Foreclosurepedia Nation has come to expect when I refer folks. If you are having problems getting paid; if you did the work and the Order Mills are screwing you, zlien would probably be the first place I would recommend going.
