As of January 2012, there are about 6,082,000 mortgages that go unpaid every month. That means that there are about 6 million mortgage inspections performed every month. On HUD loans, HUD pays $25 for every mortgage inspection. That $25 number is shown in their most recent mortgagee letters ... it's not a made-up number. For most other non-Government loans, the banks charge the homeowner on the average of about $50 for each inspection. So, banks get about $25 - $50 for every mortgage inspection ... either from the Government or the homeowner.
About five large field service firms provide most of the mortgage inspections every month. These five firms are managing about a million inspections each every month.
So why are the mortgage inspections fees so low with many in the $2 -$3 -$4 range? The reason is that quality is not important ... investors require the monthly inspections ... and the inspectors are just checking the box that the inspection was completed. Today mortgage inspection fees are HALF of that they were 15 years ago and more work is required. Some firms paying $3 are requiring as many as 7 photos. Fifteen years ago, the national field service firms performed ALL of the data processing using their staff. Today the field service inspectors are up late at night entering data at a website and uploading photos. For them it's day work in the field and night work at the computer.
In today's market, if one of the large national field service firms can cut a mortgage inspection fee by $1, they will increase their revenue by 1 million dollars a month, or 12 million dollars in a year. These same firms will accept low quality work and charge a penalty to the inspector with some penalties being as much as $60 on a later inspections. Some field service firms are underpaying inspectors every pay period because many mortgage inspectors are lazy and do not keep track of completed work. If you as an inspector don't have good records for completed work, it is easy to short-change you. It happens every day ... some firms program it into their accounting programs ... I know that from insider information. If a large firm can short-change inspectors about 10% without notice, they can put one million addition dollars in their pocket every year.
There is a lot of puffery about making money with mortgage inspections. It's often advertised that you can easily perform 200 of the $3 inspections every day with very little driving because they are all so close together. It takes about three weeks before a field inspector discovers that they are not that close together and that they are wearing out their vehicle and not making any money. That is not a problem for the customer because your replacement is standing in the background waiting for this great opportunity of making $600 a day. It always sounds great until you do the math in a real world.
With the low fees in the mortgage segment of the industry, it is no surprise that the mortgage segment is the home of low pay and of 99% of all of the problems in the field services industry. If one large national field services firm can cuts fees paid to inspectors by just 50-cents, they can put another 6 million dollars in their pocket every year. If the cut is $1, they will put about 12 million dollars in their pocket very year. When HUD pays $25 for an inspection and the field inspector get $3, then there is $22 per inspection that the bank and the large national field service firms share.
Turnover is tremendous in the mortgage segment as the central large firm motivation is to always find inspectors for a lower fee and replace them at a lower fee. There are no qualifications (maybe a background check) ... no job interviews. Just respond to the Craig's List posting of $3 for a mortgage inspection and you get the job ... at least until someone offers them $2.50 to complete the work and then you are gone with no notice. Mortgage inspections is all about making money for the large national field service firms and quality means nothing. Many of the large national field service firms are demanding TOO MUCH for CHUMP CHANGE (slang ... a small amount of money).
In today's market, if one of the large national field service firms can cut a mortgage inspection fee by $1, they will increase their revenue by 1 million dollars a month, or 12 million dollars in a year. These same firms will accept low quality work and charge a penalty to the inspector with some penalties being as much as $60 on a later inspections. Some field service firms are underpaying inspectors every pay period because many mortgage inspectors are lazy and do not keep track of completed work. If you as an inspector don't have good records for completed work, it is easy to short-change you. It happens every day ... some firms program it into their accounting programs ... I know that from insider information. If a large firm can short-change inspectors about 10% without notice, they can put one million addition dollars in their pocket every year.
There is a lot of puffery about making money with mortgage inspections. It's often advertised that you can easily perform 200 of the $3 inspections every day with very little driving because they are all so close together. It takes about three weeks before a field inspector discovers that they are not that close together and that they are wearing out their vehicle and not making any money. That is not a problem for the customer because your replacement is standing in the background waiting for this great opportunity of making $600 a day. It always sounds great until you do the math in a real world.
With the low fees in the mortgage segment of the industry, it is no surprise that the mortgage segment is the home of low pay and of 99% of all of the problems in the field services industry. If one large national field services firm can cuts fees paid to inspectors by just 50-cents, they can put another 6 million dollars in their pocket every year. If the cut is $1, they will put about 12 million dollars in their pocket very year. When HUD pays $25 for an inspection and the field inspector get $3, then there is $22 per inspection that the bank and the large national field service firms share.
Turnover is tremendous in the mortgage segment as the central large firm motivation is to always find inspectors for a lower fee and replace them at a lower fee. There are no qualifications (maybe a background check) ... no job interviews. Just respond to the Craig's List posting of $3 for a mortgage inspection and you get the job ... at least until someone offers them $2.50 to complete the work and then you are gone with no notice. Mortgage inspections is all about making money for the large national field service firms and quality means nothing. Many of the large national field service firms are demanding TOO MUCH for CHUMP CHANGE (slang ... a small amount of money).
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