Category Archives: A Team

PPI Fee Structures: Independent Contractor or Minimum Wage Employee

Organics Admin
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Organics Admin

COO at Aladay LLC
Organic Farmer, Property Preservation Specialist and Custom Glass & Wood Worker. Blogger extraordinaire...
Organics Admin
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CAN THE

NATIONAL PROPERTY PRESERVATION GUILD

SUCCED WHERE OTHERS HAVE FAILED?

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With the current climate throughout the Property Preservation Industry (PPI) it seems like this would be the perfect time for an organization advocating for the contractors to come together. One of the biggest issues in the PPI right now is the fact the 54.3% of Contractors surveyed feel like they are an employee.

Enter the national Property Preservation Guild (NPPG). On the surface seems like a novel concept. A group of Contractors coming together to represent themselves in the face the downward spiral the industry has taken no thanks to the only organization currently claiming to “advocate” for everyone in the PPI, National Association of Mortgage Field Servicers better known as NAMFS. When I search to see this organizations advocating activity it appears that the only ones they are advocating for is themselves and those companies that their Board of Directors represent throughout the industry, but that’s a story for another time.

Let us look at the NPPG and why they will have a very difficult time succeeding where others have failed. One of the biggest issues facing the Boots on the Ground Contractors (BTOG) is the fact that there are so many companies out there with a business model that is known as “subbing” and the companies that have become known as Regional Order Mills (ROM) have  these cushy contracts with the National Asset Management Companies (NAMC). You see the NAMC “sub” the work to the ROM and they remove a layer, usually 20% of the invoice amount for merely transferring the work order to another company. Who may in turn once again sub to a company who also does not perform the services thus creating what is known as an Otherwise Unauthorized Order Mill (OUOM).

Let us examine this for just a minute. The NAMC looks to reduce their overhead. The quickest way to do this is by reducing the amount of incoming companies they have to deal with. In order to do this they need one company that will cover say an entire state, thus they only have to deal with one entity. They let the entity deal with the 1500 vendors they had, pretty good business model. Now that company the ROM since they actually do no work they only transfer the work orders, finds say five contractors to cover the territory they have been given or the OUOM. Still a great business model as everyone in the food chain so far has yet to actually take on any financial risk or even do anything but transfer work orders.

Enter the BTOG. This is the group of people that actually put the resources into play that are required to complete the services for the “Client”. They pay labor, pick up the disposal fees, fuel costs, storage fees where applicable, pay for the new locks that are placed on the properties when the former occupants have moved out. So what’s the big deal you ask isn’t that part of doing business? Yes, but here is the catch, the ROM is receiving the same amount of money for service fees that the BTOG received 7 years ago, they take a percentage and pass it on to the OUOM and they take a percentage and pass it on to the BTOG. Now for the seasoned BTOG out there very few are doing lawn cuts anymore unless they are working directly with the main supplier of the work orders. The companies that are working with all the middlemen or “order mills” are doing so at their peril. You see seven years ago $0.80 to $0.85 on the dollar was actually going to the BOTG to have the properties serviced. Contractors made respectable livings and took a lot of pride in the product they delivered. Somewhere around the end of 2008 the philosophy that “the only way to make money in the PPI is to sub the work” entered the picture…Just as Marx forgot to include “the nature of the beast” into his socialism and communist theories of government the lazy capitalistic minded powers to be have forgotten to include the fact that someone eventually has to physically complete the services. With this current business model rampant in the industry the Contractors are only receiving approximately $0.25-$0.30 on the dollar. In addition this places the contractors in serious financial peril.

Financial peril you say??? I say this for several reasons. One, probably the most important one is the fact 61.4% of Contractors surveyed have stated they have completed services for a company having a business model of subbing work only to not get paid. This is the chain of events that has become an accepted business model by all participants in the PPI. The NAMC routinely take 30 days to pay or what is called “net 30”, the ROM allows for this by pushing out to “net 45”, the UOM goes to “net 60”. The “peril” for the BTOG becomes getting paid. You see they have to trust the fact that all the go between companies “subbing” the work to them is actually going to pay them and not tell them “We haven’t gotten paid by so-n-so and we won’t be able to pay you this week”, when the check is late. As previously stated the BOTG are financing the industry and everyone in between them and the lender or “client” has yet to assume any risk at all. It is the BOTG that must foot the bill to complete services and then wait 30+ days to be paid. This is sort of like you loaning your bank money for 30 plus days interest free. I don’t know of any bank that will make an interest free loan, yet the Contractors are required to assume all the liability, insure and finance this industry. Pretty sweet deals for the lender who has never done anything but make a bad loan taking the property as collateral and is able resell the asset.

Now let us go one step further and discuss for one minute the nonpayment issues plaguing the industry that NAMFS and NPPG seems to want to ignore. I say “ignore” as they have not taken a position on anything that directly affects the Contractors. In fact there is currently a NAMFS member that has made the headlines for not paying contractors(http://foreclosurepedia.org/yet-another-order-mill-in-ohio-screwing-contractors/ and http://www.katv.com/story/22944791/mid-ohio-field-services?goback=%2Egmp_4730139%2Egde_4730139_member_261277516),[prior to publication of this article I received a call about a company ASAP another member of NAMFS not paying Contractors, at this time I have not received documentation, but a complaint never-the-less. You can be assured this will be investigated and we will report what we find]. Here is how easy it is to net a million dollars in this industry and in a relatively short period of time.

Let us suppose for a minute that a NAMC has entered into a contract with a ROM that went into business last week. The contract involves the coverage of three states. The ROM decides not to use a UOM, so they are issuing work orders to 1,500 Contractors. Now let’s say the ROM decides they don’t want to pay for whatever reason…Oh say the CEO of said ROM wants to take a pretty girl around the world on a big fancy boat. So the ROM holds back $500.00 from every vendor this month. That nets the ROM $750,000.00 this month. Now the ROM knows that they have another month worth of invoices coming in within the next two weeks and the ROM knows they can do this at least two or three more times before the Contractors stop accepting work orders. So the ROM can effectively embezzle 2.25 million dollars within 90 days. I would say that is a pretty good income with assuming no risk while just transferring paperwork. That is their bonus, as they have transferred Seven million work orders at a 20% discount for an additional, let’s say 1.4 million (this number has been grabbed out of the air to make a point but the first figures are a scenario that is not only plausible has happened.). Please do not think I’m saying all ROM and UOM do this. But there is an above average amount of companies (compared to other industries) taking advantage of the “process”. So why is this not being addressed by any of the organizations claiming to advocate for the Contractors? Why haven’t any of the organizations developed a “Conflict Resolution Hotline”??? Especially since 66.4% of the Contractors surveyed feel that there should be an independent third party mediator for conflict resolution.

Many of you are probably asking yourself, why aren’t these BOTG companies placing liens on these properties? Another issue no group claiming to advocate for the contractors will take up. The “No Lien” clauses the Contractors are forced to sign. If anyone had any gumption at all they would know that 60% of the Contractors feel the lien clauses need to be removed from the contracts and that 62% feel that they should be allowed to lien a property if they have not been paid in 30 days.

When I look around the industry the only system I see is an Istar system that has been set up by the folks at Foreclosurepedia. The problem we have in the industry being unregulated there are no numbers to actually account for numerous times this has happened and for whatever reason there is a reluctance on the Contractors part to file a complaint in the Istar system so numbers can be entered into a matrix, which makes it hard for any organization or individual to be able to provide some concrete number. We can only hope that more contractors will get on board to stop the embezzlement epidemic plaguing the PPI.

By now you must be asking where I’m going with this and what does this have to do with the NPPG being able to succeed where others have failed???

  • For a group that claims to “advocate for the Contractors”, I could not figure out why the organization would not issue a position on this matter. Even thought they do not seem to be very organizationally minded, as evidenced by their changing of their mission statement 6 weeks after they came up with…get this statement…

The mission of the National Property Preservation Guild (Guild) is to facilitate an environment where clients are placed in the best possible position to ensure Return On Investment (ROI). The Guild will serve as an advocate for Contractors whom regularly deliver excellent service, with ethics and integrity as the foundation of their business. In addition to supporting members and Contractors, the National Property Preservation Guild will provide educational programs to confirm all members are qualified to supply the highest quality service to the clients they serve within the preservation industry. 

I’m guessing that there had to be pressure from somewhere,(http://foreclosurepedia.org/foreclosuregate-why-the-namfs-and-nppg-are-asleep-at-the-helm/), as the statement they now use places the Contractors in front of the “Clients” but still the organizations is concerned about the “clients” return on investment. This is how it now reads;

MISSION STATEMENT

The mission of the National Property Preservation Guild (NPPG) is to serve as an advocate for Contractors whom provide quality services that aid in ensuring maximum Return On Investment (ROI) for property preservation clients.

Now there’s a fine how-do-you-do intensely humble, backhanded approach, when claiming to be an association advocating for the Contractors. I have yet to see any lender have concerns that the Contractor stays in business or even cares if their power bill is paid. So why would any organization claiming to advocate for the Contractors have such grave concerns for the clients ROI? Unless…are there other motives in play?

Back to why the NPPG will have a very difficult time succeeding where others have failed. I believe it is the same reason that the NPPG is spineless and will not issue a statement or position paper concerning the ROM and UOM and why the industry needs to be rid of them. Many of the Board of Directors “sub” their work out. Now they can’t very well take a position against their own business model or take the position against other companies that sub the work out, unless of course, they could be allowed to continue with their business model. Which brings one to the issue, is the organization truly advocating for Boots on the Ground Contractors? According to the NPPG a BOTG Contractor is someone that goes out in the field and completes services. No I’m afraid by being part of the “subbing” portion of the PPI they are part of the problem plaguing the industry that they claim they want to help clean up.

What we actually have is a bunch of Contractor’s that really want to believe in something and are willing to listen and take a chance and follow these leaders of the NPPG. One has to wonder if this isn’t some sort of conspiracy by the NAMC. Have companies like Corelogic, FAS, Safeguard Properties, MCS etc. had some of their better Contractors infiltrate the NPPG and set it up to make things appear like there is really something or someone out there that cares FOR the contractors? Has this been done to make things appear that there is hope for the BTOG? Sadly I don’t know I have no answers for those questions. However, I believe in the days past, days of Jimmy Hoffa, these people would have been called “Union Busters”. However, they can’t be a union buster as the NPPG just recently announce that they will be an “Association” another sign of just how unorganized this group is. An “Association” that will provide an “educated qualified work force” to the industry. An organization that is going to “re-educate” the client on what a quality contractor “looks” like. Seriously? Now there’s a novel concept, I wish them the best of luck with that.

The original concept of the National Property Preservation Guild was that of; Boots on the Ground Contractors, Contractors that actually went out in the field and completed services, coming together so they could make a stand on the injustices currently going on in the industry. Contractors coming together to stop the downward spiral that, IMHO, NAMFS allowed to happen while claiming to represent all parties in the Mortgage Field Service Industry. I just do not understand why when a group or organization states they “advocate” for another group why there is no position taken in an advocating manner? Why hasn’t the NPPG taken a position in regards to the Service Contract Act? The SCA after all does affect the Contractors they claim to advocate on behalf of. Furthermore, why hasn’t the NPPG taken a single position on behalf of the contractors in regards to the numerous issues in contracts that basically make a company an employee with no employee benefits? Why has there been no comment in regards to the demand for a company’s employee’s personal information and all of their “subs” employee’s personal information to be sent on unsecured lines and unencrypted? Why has the issue of request for credit checks not been addressed?  I’m puzzled, as there are so many issues in the PPI, there have been even more opportunities given for positions to be made by all organizations claiming to represent and advocate for the Contractors. In defense of NAMFS you must be a member of their organization to receive acknowledgement for your place in the PPI. If you’re not a member of their exclusive club, you do not exist. If there was truly an association or organization out there honestly advocating for the contractors they would know the 68.9% of contractors surveyed feel that subbing on any level in the PPI, with the exception of trade specific services needs to leave the industry because they feel it is an exploitative business model.

As a colleague of mine has said in the past “Welcome to the Rabbit Hole” the long convoluted tunnel in the Mortgage Field Service Industry called Property Preservation. That is what makes this industry so easy to hide from the rest of the world. However, I, along with many others “in the know” if you will, throughout the industry am convinced that regulation will come to this industry. It will happen with audits, because of lawsuits, especially when the many health issues get exposed the industry has been able to hide for so long. It will happen with IRS audits of the Independent Contractor/Employee issues in the industry. It will happen as the media starts to get more and more involved with the graft and corruption plaguing the PPI that organizations like NAMFS and NPPG seem to see fit to ignore.

You see, when you have a group of people offering “lip service” instead of being in touch with how your base membership feels about what the organizations necessary actions should be  to correct the injustices in any industry , the only thing you’re assured of is failure.

Windows: Has the Time Come to Replace Yours?

Organics Admin
Follow Me!!

Organics Admin

COO at Aladay LLC
Organic Farmer, Property Preservation Specialist and Custom Glass & Wood Worker. Blogger extraordinaire...
Organics Admin
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Latest posts by Organics Admin (see all)

One of the services Aladay LLC offers is glass replacement, custom mirror work and we work in conjunction with Viper Glass of Winnemucca for window replacement services. Viper Glass, a small very well established family owned full service glass shop offering auto glass replacement in addition to residential and commercial glass replacement services. One their most important services specialties is assisting people upgrade their home’s window systems with newer more energy efficient windows. The Bricker’s Tom and Carol and their son Kenny are the backbone and soul of the company. Tom going out in the field performing consultations with Kenny running all over the west coast either picking up supplies or delivering them and Carol running the office making sure all the bills get paid and that a cheerful smiling face is present to greet the customers.

Since we do offer glass services I thought I’d take a minute to address some of the types of window options that people have. There are several window manufactures out there. I remember back in the late 70’s a buddy of mine, Bruce called me one day knowing I was looking for work and asked if I’d like to come make windows with him. I’ll never forget that conversation…I don’t know a thing about glass I said. He told me..Look dude I see your wood work and it is awesome, you’ll be doing the same thing just with different materials.  The rest is history as they say!!!  While Bruce was correct about one thing I did just about the same thing with different materials, however, there was a whole new set of tools I had to learn how to use. I’ve worked on some pretty amazing projects over the years from multi-million dollar homes to major commercial projects. But I think I get the most joy out of helping the home owner bring a new look to their homes with new windows and custom wood window sills and trim. Here is some information I hope will assist any decision you may have to make about window products for you home.

 

Since heating and cooling costsare on the rise, and if your windows are outdated, your hard-earned money could literally be going right out the window. If your old windows are drafty and outdated, consider replacement windows. You’ll add to the value of your home while saving money on heating and cooling costs. In addition, replacement windows will add to the aesthetic appeal of your home.

Whether you decide to chose Western Products, Anderson, Four Seasons, Pella, or one of the other numerous quality window manufacturers out there understand that there are many styles and types to consider, and they all have their own special attributes. There are advantages and disadvantages to every type of replacement window. Consider the style of your home as well as the versatility and durability of replacement windows. Replacement windows are a major investment in your home, so take the time to consider all possibilities.

Here is some information I gathered from the Yahoo Do it Yourself page about the various styles of windows. In addition to the style of windows you decide on you will also want to chose the correct type of glass to achieve the best performance for you new windows, A bit on the types of glass follows the window style information.

 

Clad

Clad windows offer the durability and beauty of wood inside the home, and the quality and resilience of weatherproof aluminum or vinyl on the outside. Offering the best of both worlds, clad windows are the most expensive replacement alternative.

Vinyl clad wood replacement windows are virtually maintenance free, and they are available in a wide variety of colors and styles. Their insulating properties are excellent, and therefore a better choice for more drastic climates. Exterior scratches are less likely to show since color runs throughout the vinyl, and they will continue to look new and last for a number of years.

Aluminum clad wood replacement windows are also a great option, especially in milder climates. Insulating factors aren’t as great, but aluminum clad replacement windows are by far stronger than the vinyl clad variety. On the downside, they are more likely to become scratched, but they can be painted if necessary, unlike vinyl.

 

Wood

Wood replacement windows offer classic beauty and style, and they provide natural insulation. Although they look great when new, wood windows require protection from the elements, and they are one of the most expensive options. Wood replacement windows are popular, but if inadequately protected they will eventually rot, split, or warp, and they are subject to sticking during bouts of humidity. Regularly painted and maintained, they can last for generations.

Aluminum

Aluminum replacement windows aren’t subject to splitting, warping, or shrinking, and they are exceptionally durable. They’re lightweight for those who might have trouble raising heavier windows, and they’ll provide many years of problem-free use. On the downside, aluminum windows improperly insulated are subject to condensation. They’re a great choice if you don’t live in coastal areas where salt in the air will quickly deteriorate the finish.

Steel

If you have unlimited resources, steel is by far one of the best options for replacement windows. They’re usually installed commercially, and they are much more durable and weather resistant than any other material. Steel replacement windows will more than likely outlast any other type you could choose.

Fiberglass

Fiberglas replacement widows are one of the newest varieties on the market. Their overall quality and durability exceeds clad wood, vinyl, aluminum, and solid wood replacement windows. They are also the superior choice when considering very large windows, since they are capable of supporting larger panes of glass. Additionally, fiberglass can be painted, and it won’t warp, crack, peel, or split. It’s clearly one of the best options, if you’re willing to pay upwards of double the cost of ordinary vinyl windows.

Vinyl

Unlike wood clad vinyl windows, regular vinyl windows are hollow inside, but they are still strong. Although they are dent resistant and sturdy, they can become distorted in areas of extreme cold or excessive heat. All things considered, vinyl windows are still a good choice since they are very affordable, and they provide good insulation for many years to come.

Green energy is not only about building sustainable clean energy products to protect the planet, it is also about energy efficiency–and that impacts the homeowner right in the pocketbook. As with many industries in the 20 years since I co-founded our business, which became one of the largest replacement companies for vinyl framed windows and doors in the Los Angeles area, I have seen significant strides by most door and window manufacturers to provide more energy efficient and economical products.

Windows & Doors

A large part of a home’s energy efficiency is a function of the degree to which the home is properly insulated, and having energy efficient doors and windows is a giant step in the right direction. But changing doors and windows is not only a matter of putting in new ones. There are many other considerations—concerns about view obstruction, lighting concerns, noise considerations, maintenance concerns, ventilation, and building code and safety requirements, just to name a few.

Glass Efficiency

A large window with an unobstructed view frequently serves as the centerpiece of a room. The glass can be as much as 90 percent or more of a picture window. Most municipalities have building codes that require energy calculations that must be met. These calculations take into consideration the square feet of glass in a window versus the cubic feet of living space in a particular room.

The more efficient a window, the less heat will be transferred from the inside of the house to the outside during cold weather, and the less heat transferred from the outside to the inside during warm weather. The U.S. Department of Energy has released an excellent publication on window glass efficiency.

The Tradeoff

The often not well understood problem with glass efficiency is that the more efficient the glass, the more natural light it blocks. An inexpensive but limited way to improve efficiency of single glazed windows is to add tinting film–the film blocks light, reduces glare, and some heat. But glass, itself, conducts heat and cold. One needs only to touch a window on a cold or hot day to know that story. In order to make glass more energy efficient, glass manufacturers developed dual-pane or double-pane glass; two pieces of glass separated by a spacer bar, made of energy efficient material, and hermetically sealed to prevent air or moisture between the pieces of glass. Heat and cold transfer is less efficient because of the dead space between the two pieces of glass, giving the glass greater insulating value.

But this is only part of the battle. Insulated glass does not protect from direct sunlight, so manufacturers coat the interior surface of the exterior piece of glass with a chemical called Low-E. Low-E coating is a thin nearly invisible coating of a metallic substance that reflects ultraviolet light; the heat-producing rays of the sun. Unfortunately, some light in the visible light spectrum is also blocked, so the more efficient the glass the more light is blocked and the darker the room.

The Moral of the Story

There are different levels of protection and there is something called “spectrally selective glazing,” which attempts to maximize the visible spectrum. Confusing. The moral of the story is to do your homework. Discuss the project with your building materials expert and your local department of building and safety, even if you intend to do the actual replacement work yourself.

Please do not hesitate to contact us for more information if you have been considering new windows for your home. We’ll be more than happy to assist you with a consultation for windows or any of your glass replacement needs.

Until Next Time…