The ascension of HUD’s Craig Karnes from the Directorship of the Management and Marketing (M&M) contract to HUD’s now Acting Deputy Chief Procurement Officer has been littered with the bodies of Labor. And for all of the Beltway Protection that HUD Secretary Marcia Fudge has been showering upon Atlanta, where Karnes is based, the reality is that the schtick is wearing thin. In fact, green lighting the extremely questionable activity ongoing with respect not only to the M&M FSM Awards, but the oversight of the Mortgagee Compliance Manager (MCM) over the years, is a target on the back of HUD. And in such trying times in our Nation right now, many are asking whether or not the spending of political capital upon a six foot plus tall white man is really worth it.
Karnes, HUD’s Acting Deputy Chief Procurement Officer, knew for months that the M&M Field Service Manager (FSM) Awards to 24 Asset Management were problematic. Eduardo San Roman owns the firm as well as controls Assero, which is part of the 24AM family. In July of 2023, we reached out to Karnes and advised him not only about the conflict of interests, but the nearly $1 Million in debt owed to Labor on Fannie Mae and LoanCare assets. Here was his reply,
I’m not at liberty to discuss the 3.12 corrective action, but HUD is aware of the relationship between 24 Asset Management and Assero. If 24 Asset Management were to continue with a HUD award, they would be required to mitigate any identified Conflicts of Interest.
Not at liberty to discuss and mitigate are several of the racially charged dog whistles which both Karnes and HUD have honed, over the years, in order to protect their financial interests. Whether it be Karnes’ Harley Davidson motorcycling weekends or his Freedom of Information Act (FOIA) stonewalling partner Denisha Gilet’s refusal to allow Labor to use HUD forms for training, the reality is there are real problems with governing at HUD. Fact of the matter is that Foreclosurepedia has simply been bringing the the corruption to light. And when you look at the fact that the pricing 24 Asset Management and others are rolling out is 30-40% LESS than what had been paid on the HUD M&M FSM, the reality is the contract is dead on arrival. In fact, the vox machina, within HUD’s deep state, is beginning to crack under the pressure.
Here is how one Member of Labor put it in a forwarded email sent to 24 Asset Management and to Foreclosurepedia, which was forwarded to Karnes, himself,
We are declining to work with 24 Asset at this time. While we do cover remote areas of Arizona, Utah, Nevada, Wyoming and Colorado, we will not apply until outstanding debts have been paid.
As the parent company of Assero, there is still an outstanding debt owed to us for inspections in June, July and August of this year. We were not paid for completed work orders despite many attempts and have no obligation to continue to work with a company that does not honor their contracts or labor force.
The question that presents is precisely how much money Karnes is pocketing for ensuring the smooth transition from the previous HUD Awardees to 24 Asset Management and Eduardo San Roman, personally. Is it simply low number, non sequential bills dropped off at a rest area or something far more nefarious, we do not know. Moreover, though, how much money will this cost the US government in having to re-award the contracts, yet again?
The removal of fraud, waste, and abuse are the cornerstones of all US government agency Offices of the Inspector General. And yet in the instant case of the 24 Asset Management, it would appear that Eduardo San Roman has paid off All the Right People. Here is the dirty little secret that Craig Karnes and his internal network of protectors do not want you to know. For Fiscal Year 2022-2023, 24 Asset Management received $60,658,866 in Awards, all from HUD — might as well just put from Karnes, here. And yet previously, from 2021-2022 24 Asset Management only received $83,719 from the USDA for performing some turf and granite replacement at the National Herb Garden entrance and another $29,748 from the USDA for the Seasonal Maintenance of the Flowering Tree walk.
The fact of the matter is that in the entire US government contracting history of 24 Asset Management, the combined total of Awards was only $257,857 with not a single Award exceeding $83,000. Even more concerning is the simple and salient fact that 24 Asset Management has never performed a US government contract for HUD let alone pertaining to the property preservation sector.
Some back of the napkin math here is that 24 Asset Management entered the System for Award Management (SAM) system in 2011. That means, if broken down by year, 24 Asset Management averaged $21,488.08 per year in Awards and then, after climbing up on the Karnes Train, they received a mind boggling $60 Million plus in Awards. Bearing in mind that their subsidiary Assero, whose relationship was acknowledged by Karnes himself, owes nearly One Million Dollars, the reality is even preschoolers could see the problems with this Award.
Labor has categorically turned down the corruption which Karnes is pushing out through his office and are refusing to provide services. And as our email campaigns from the International Association of Field Service Technicians (IAFST) to Congressional staffers have now brought over a million dollars a year in increased inspection pricing to our Membership, so to will the HUD M&M contract simply become a page in the history books. The reality is that the HUD M&M contract is as meaningless as the paper it is written upon — typos and all. Less than 14% of all mortgages are even FHA – HUD and when it comes to the M&M FSM, that number drops to merely a couple of dozen assets that are not custodial throughout the entire United States. For years, HUD was willing to provide the accurate numbers, but after the latest debacle of the HUD M&M by Karnes, that data is no longer available.
As we approach the holidays in earnest, we wish each and all a safe season. And as Labor has now proven they will shut down contracts which refuse to pay a living wage. And as Labor has now begun to vote with their work product, the reality is those Prime Vendors whom are continuing to refuse to increase pricing on Fannie Mae, Freddie Mac, and HUD will soon see an inability to perform.
