HUD Announces M&M III Contracts, Separates Functions

Posted by Orb Staff on June 15, 2010 No Comments
Categories : Mortgage Servicing

S. Department of Housing and Urban Development (HUD) has announced it is awarding contracts to 23 companies to serve as asset managers (AMs) and 32 other firms to serve as field service managers (FSMs) under the third generation of its Management and Marketing (M&M) program, known as M&M III. The new contracts are intended to reduce risk, increase sale prices and accelerate the pace of reselling HUD's inventory of foreclosed Federal Housing Administration (FHA) homes. Under prior agreements, M&M contractors were responsible for both maintenance and marketing of HUD's real estate owned properties. The change announced today separates those functions, thereby increasing the effectiveness of the department's asset disposition program, HUD says. The FSMs will be responsible for property maintenance and preservation, and the AMs will be responsible for the sale of the homes. ‘These new contracts epitomize FHA's continuing effort to reduce risk, increase net returns, decrease holding times and improve efficiency in the resale of its inventory of foreclosed properties,’ says HUD Secretary Shaun Donovan. ‘It is critically important that FHA successfully and efficiently sell its inventory of these properties, and these contractors will help us do that.’ Since 1999, HUD has been outsourcing the disposition of its foreclosed FHA inventory under the M&M contracting process. After researching market-based best practices, HUD developed its new M&M III disposition structure to streamline its operations, capitalize on the expertise of potential vendors and provide flexibility in a changing environment. HUD's current inventory of foreclosed FHA properties is approximately 44,000 homes – up from the usual average level of 35,000 to 40,000. There will be multiple FSM and AM contractors in most areas. This is expected to foster competition among the contractors, thereby improving responsiveness, reducing risk and increasing net returns to the agency, HUD says. Each contractor will establish an office within its awarded geographic area, and HUD's Homeownership Centers in Atlanta, Denver, Philadelphia and Santa Ana, Calif., will be responsible for the direct oversight of the new contracts within their respective jurisdictions. The [link=http://portal.hud.gov/portal/page/portal/HUD/documents/amfsmcontractors.pdf]list of awardees[/link] for each area is available on the HUD website. SOURCE: [link=http://portal.hud.gov/portal/page/portal/HUD/press/press_releases_media_advisories/2010/HUDNo.10-122]HUD

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