Mortgage Field News: Feedback and Fury
By David Brauner, Editor
Dear Mortgage Field Professionals-
The last edition of our newsletter set off a bit of a firestorm nationwide as abuses by large vendor management companies begin to surface. In response, Working RE/OREP.org established a blog page as an information exchange for contractors. You may leave your comments here
Two interesting resources sent to us are a law firm who is involved in a class action suit against a large vendor management company for treating Independent Contractors like employees. You can visit their website here: http://www.kpalawyers.com/index.html
The other is a link to all the state Attorney Generals where you can submit an inquiry. It is recommended that you submit an inquiry in your own state and in the state where the vendor management company is located: http://www.consumerfraudreporting.org/stateattorneygenerallist.php
Finally, here’s an email sent to us with the name of the large vendor management company removed. It lays out what tactics to look for so you can avoid a lot of prolonged pain when dealing with at least one large vendor management company. If you’d like to connect and exchange information with others who have had similar experiences, you can do so on our blog page: Mortgage Field Chatter.
Dear David:
The article that you wrote about the restraint of trade and asset management contractor abuse is spot on but just the tip of the iceberg. I suspect you may know this, I sensed quite a bit of restraint in your article. You see, our company has very fresh wounds from our dealings with (ABC Company). We are currently out thousands of dollars after working for them from July through October. We are in the process of filing liens on homes, contacting attorneys and politicians etc.. at the moment. It is a struggle, trying to go after these thugs but still try to make a living at the same time. I am wondering if anyone you have been in contact with has gotten any further in initiating a class action lawsuit. If so.. we definitely have LOTS of documentation and experiences to offer the case.. and if not, then we may just be interested in networking with others in finding an attorney to take this on.
The tactics that this company uses are downright unbelievable like CHARGING you MORE in reassignment fees then what you would have gotten to do a job if you dare refuse the order or can’t abide by their unrealistic due dates, popping orders on your worklist that are already late and with no notice then charging you for re-assignment if you can’t get to them immediately that day, demanding that you do free work and then charging you the next contractor’s fee if you refuse, telling you that YOU are responsible to pay for their field QA reviewer’s fee if ANYTHING is found wrong at a property, and telling the QA person they will not be paid if they do not find anything wrong.
This results in contractors being denied payment and charged for things like newspapers left on front steps or dead flies on a windowsill seen by the QA person days or weeks after a service is performed. It’s a big shell game basically; very little money is paid out of their pocket to the contractors. Instead, they are shuffling earned fees from one contractor to pay the next one. They purposely set up a contractor for failure, by many different means – from outrageously cumbersome updating and billing procedures (12 hours online answering hundreds of questions and uploading 300+ photos to clear a $75 job that only took three hours to do in the field), to changing the instructions and terms of work with no notice, to downright lying and refusing to pay even when plentiful evidence is presented to them that work was completed to their instruction.
We even have email proof from a broker that she was threatened and forced to submit a review of our work on a property before the work was completed or she would face financial penalty herself. When she entered it as incomplete – we were refused payment for the $800 work even though it WAS finished by the time the report hit the system, charged $100 for her 0-$30 review fee and were charged more than $900 to “pay for someone else to do the job” even though we provided over 300 photos showing that the work is already complete.
This means that on top of not paying for the work done to the home, they “extracted” another $1,000 from our fees earned on other jobs. That money did not go to any other contractor – because there was no work left to be done. It went straight to their pockets. They are doing this to thousands of contractors all over the country. We have other instances in which they extracted money on our earned fees to (supposedly) pay someone else for work that we refused to do for free. (Example: we completed a trash-out, securing and exterior handrail installation on a home and billed them only for those items. Weeks went by and the broker asked for a handrail to be installed inside the home that was not on the initial work order. We were demanded to return to the property and do it for free. Since we did not charge them for this on the first billing, we asked to be paid to complete it and refused to do it for free. They canceled the order, then charged us to pay someone else to go out and do it).
It sounds unbelievable but it is true. And just one of many, many similar events. It takes about three months to really start to realize what they are doing. Once you start working for them it takes 45 days to get your first check then they pay weekly from there, about 30 days out. It wasn’t until the second 30 day cycle that the “chargebacks” started coming but then you try to be reasonable and give them the shadow of the doubt and submit your “proofs” and rebuttals to the chargebacks and try to figure out how to work with them to avoid the chargebacks in the first place. By the time you are 90 days in you start to realize that your proofs don’t matter and you will NEVER know exactly what can avoid chargebacks because there are no set or uniform procedures in place- they change the rules on a whim or just plain take what they want when they want and you really have no say in the matter.
It is at this point that you start developing an exit strategy to stop the bleeding. You can’t just quit them cold turkey because at this point they owe you thousands and will issue chargebacks on any work that you decline which will erode away anything they might still pay you. You have to sneak away, slowly and when they aren’t looking, just like any other abusive relationship I have ever heard of.
Please share our contact information with anyone else that wishes to network on this issue, and especially if there is anyone that you are aware of that has made progress with pursuing legal actions.
Thanks!!
-Name left off for fear of reprisal.
For the best package of price and coverage for you E&O and General Liability needs, visit or call OREP.org (888) 347-5273.
About the Author
David Brauner is Editor of Working RE magazine and Senior Broker at OREP.org, a leading provider of E&O Insurance for mortgage field inspectors, appraisers, home inspectors and other real estate professionals in 49 states. He has covered the appraisal profession for over 16 years. He can be contacted at dbrauner@orep.org or (888) 347-5273. Calif. Insurance Lic. #0C89873.