Housing and Urban Development (HUD), under the Biden Regime, recently witnessed the Secretary, Marcia Fudge, resign. Adrianne Todman is currently the Acting Secretary of HUD. And with only two and a half years of senior level experience at HUD, it is showing through like a slow motion trainwreck. While not perhaps important to Todman, the HUD M&M AM and FSM contracts are a disaster. Todman and Fudge casually overlooked the multi-million dollar fraud perpetrated on the M&M FSM with 24 Asset Management. HUD’s Acting Deputy Director of Procurement, Craig Karnes, is well aware of the latest fraudulent actions of a HUD M&M FSM Awardee, has copies of Victim Impact Statements in the form of texts and emails, as he has been, for years. Cathy Baker is the HUD Director of the M&M program. And if you noticed that two out of three of these key level positions are Acting, then you get a gold star and a reminder about how dysfunctional HUD has become.
Eduardo San Roman controls 24 Asset Management just as he controlled Assero, along with Lee Mertins, the former shot caller cum training as a books cooker at Asset Management Specialists. By the way, the italicized word cum is an ablative preposition for those of you living in Sanctuary Cities. To that point, after signing tens of thousands of dollars in bounced checks to Labor and refusing to pay nearly One Million Dollars owed on LoanCare and Fannie Mae work orders, San Roman kicked Mertins to the curb. Adding salt to the wounds, San Roman allowed the unpaid work to be sent to the IRS for billing to Labor on IRS 1099’s.
Karnes is well aware of the problems with 24 Asset Management as is Cathy Baker, unless she has living in Ukraine, over the past year. The protections currently being given to 24 Asset Management by Karnes, Baker, et al., are on par with how the Mafia operate. Whether or not they are receiving financial compensation, I do not know, but I doubt that things like this happen in a vacuum. Hopefully, the incoming Trump Administration will get to the bottom of it. With that said, while 24 Asset Management could not even figure out how to pay Labor in a couple of states, here is the gargantuan footprint protected by Karnes and Baker for San Roman.
To understand the massive expenses involved, go no further than the $15 per exterior, interior inspections AND a full maid service! The vast majority of the properties are under conservatorship meaning NOTHING happens other than a grass cut. Adding to that is the fact that there are only a couple hundred assets throughout the ENTIRE United States and its territories. Each one of those offices must be fully staffed with Regionally Based Project Managers — make no mistake we will not let Fast Eddie San Roman get away with what Innotion Enterprises and their shell company in Utah did — and the bills paid and we are already getting reports that the bills are not on par with a firm that is financially solvent.
The Field Service Manager (FSM) side is usually where most of the fraud comes from, as opposed to the Asset Manager (AM) side — the sales of the homes. Today, though, that all changed. FHA INFO 2024-12 was released entitled, Frequently Asked Question on Seller-Paid Commissions Related to the National Association of REALTORS® Settlement. It said, in part,
Since [the NAR settlement] announcement, FHA has received questions from its stakeholders regarding how the proposed settlement agreement will affect the treatment of seller-paid buyer real estate broker fees in transactions using FHA-insured mortgage financing.
Well, at least some brokers are wanting answers. That could be a good thing. What many people do not know is that one need not be licensed to win the HUD M&M AM Award. Yeah, scary, huh! Building on that, though, the NAR Settlement still has not been ruled upon and even if it is, it doesn’t cover everyone, everywhere and billions of more dollars pending in other litigation. Prudence would have been to withhold statement and maybe, just maybe, review policies in place and wait for guidance from the Courts, that actually matter.
Cathy Baker, with typical knee jerk reaction, got what she apparently wanted. Here was FHA’s response,
Under existing FHA policy, if sellers continue to pay buyer-side real estate agent commissions and fees as a manner of state and local law or custom, and if the commissions and fees are reasonable in amount, existing policy would not treat those payments as interested party contributions provided all other requirements are met.
Well, if you take the pricing that Craig Karnes and Cathy Baker have overseen, for over a decade now, reasonable would be 85%. How do I get that? Well, Prime Vendors pay Labor $7 for interior inspections that they are paid $45 for. Or, as Freddie Mac is under HUD’s conservatorship, and pays $525 to Prime Vendors, whom, in turn, pay Labor $35. So, that would be 93.34%!
