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66 e world of field service management has become one that relies heavily on negative fee management, utilizing chargebacks and fines to penalize field service crews who don't meet expectations. With financial institutions facing tighter budgets and even tighter compliance regulations, industry norms are stretching field crews as thinly as possible while setting higher expectations for performance. Many agree that it makes sense for financial institutions to utilize national and regional field service providers due to their broad vendor networks and ability to handle all of the complexities in assigning and managing work orders throughout the nation. e largest national field service companies dominate the industry for good reason, but bigger isn't always better. e mortgage field service industry is in a perpetual domino effect. At the top, investors and banks are able to mitigate losses on delinquent mortgages by imposing punitive penalties, such as loan repurchases, on servicers who fail to meet investor guidelines. In turn, servicers pass on penalties to their field service providers, in the form of chargebacks. e additional layers of subcontractors involved in the process increases the probability of risk but also provides more layers of safety to shield those at the top. Unfortunately, when things don't go as planned, the result is often that the small, local field service company pays the price by inheriting hefty chargeback fees and diminished returns. e reality of the industry is that by the time the local vendor receives the assignment, the approved amount allocated to complete the work is decreased 50 to 60 percent. With little incentive to work under such tight constraints, the local contractor gets stuck in a no-win situation. If they exceed the budget or timeline, they will be penalized through chargebacks. If they don't cut costs, they will be lucky to make ends meet. Typically, the only reasonable option left to the contractor in the field is to reduce labor costs and/or material supplies to complete the work. e end result is shoddy work with lack of attention to detail and cheap materials and fixtures that will have to be repaired or replaced frequently. e bottom line is that the client suffers when jobs are not completed correctly the first time with available resources. e local contractor is lucky to break I N D U S T R Y I N S I G H T / M I C H A E L B R E E S E It's time to change the industry reality THE CASE FOR POSITIVE FIELD SERVICE MANAGEMENT

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