FHA Announces New Contracts for Selling HUD Homes
June 15, 2010
The U.S. Department of Housing and Urban Development (HUD) awarding new contracts to 23 companies to serve as Asset Managers (AM) and 32 other firms to serve as Field Service Managers (FSM) under the third generation of its Management and Marketing (M&M) program, known as M&M III. The new contracts announced today are intended to reduce risk, increase sale prices and accelerate the pace of reselling HUD's inventory of foreclosed FHA homes.
Under prior agreements, M&M contractors were responsible for both maintenance and marketing of the Department's real estate-owned or REO properties. The change separates those functions, which require significantly different skill sets, thereby increasing the effectiveness of the Department's asset disposition program.
Since 1999, HUD has been outsourcing the disposition of its foreclosed FHA inventory under the M&M contracting process. After conducting extensive research into 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, according to HUD Secretary Shaun Donovan.
Under M&M III, the functions of maintaining and selling the property have been separated. The Field Service Managers will be responsible for property maintenance and preservation and the Asset Managers will be responsible for the sale of the homes. HUD's current inventory of foreclosed FHA property is approximately 44,000 homes. That is up from the usual average level of 35,000 to 40,000. This new system will help HUD deal with this challenge.
The list of awardees for each area is available on the HUD website.