Since 1999, HUD has been outsourcing the disposition of its foreclosed FHA inventory under the M&M contracting process. M&M Contractors manage and market single-family properties owned by, or in the custody of the Department. HUD-owned houses are often referred to as HUD Homes. These are homes that had an FHA-insured mortgage, the homeowners defaulted, and the lender foreclosed. The lender then deeded the home to the Secretary of HUD in exchange for an insurance claim payment.
Under prior agreements, M&M contractors were responsible for both maintenance and marketing of the Department’s real estate-owned or REO properties. However, under M&M III these functions have been separated to increase the effectiveness of the Department’s asset disposition program.
The Mortgagee Compliance Manager is responsible for ensuring compliance with HUD’s conveyance standards as related to title, occupancy, and property condition. Field Service Managers are responsible for property maintenance and preservation and the Asset Managers are responsible for the sale of the homes. There is one Mortgagee Compliance Manager located in accordance with the MCM Contract. As of the drafting of this document (10 March 2016) the MCM is ISN Corporation.
HUD’s National Servicing Center will have direct oversight over the Mortgage Compliance Manager. There is one Field Service Manager and one Asset Manager contractor in an area. Each contractor establishes an office within its awarded geographic area. HUD’s Homeownership Centers in Atlanta, Georgia; Denver, Colorado; Philadelphia, Pennsylvania and Santa Ana, California are responsible for the direct oversight of the contracts for the Field Service Manager and Asset Manager within their respective jurisdictions.
The key elements of the disposition structure include:
- The Mortgagee Compliance Manager (MCM)
- The Field Service Manager (FSM)
- The Asset Manager
The Mortgagee Compliance Manager performs a variety of pre- and post- property conveyance services to ensure that HUD’s interests are protected. These services include: reviewing property inspections to ensure the property is in conveyance condition; resolving conveyance exceptions; providing guidance to Mortgagees related to pre-conveyance and post-conveyance responsibilities; and leveraging HUD’s software and information systems to execute and complete the tasks within this contract.
Field Service Manager (FSM)
Field Service Managers (FSM) are companies that provide property preservation and protection services consisting of, but not limited to, inspecting the property, securing the property, performing cosmetic enhancements/repairs, and providing on-going maintenance. Properties acquired by HUD are assigned to FSMs. There is one contractor per geographic area for each HOC.
Asset Manager (AM)
The Asset Managers (AM) are responsible for the marketing and sale of REO property. There will be one AM contractor to market HUD-owned properties within the selected contract area. FHA property listings and property agent contact information are available at HUD’s REO listing site, HUD Home Store.
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