The US Department of Housing and Urban Development‘s (HUD) foreclosure moratorium is set to expire on July 31, 2021, and HUD is not extending that moratorium further. Accordingly, foreclosures of FHA insured mortgages may be initiated or resumed upon the expiration of the foreclosure moratorium in accordance with FHA requirements. To avoid displacement of severely distressed borrowers and allow them time to access suitable housing options after foreclosure, HUD is extending the foreclosure related eviction moratorium initially announced on March 18, 2020, in ML 2020-04 for persons in properties that were secured by Single Family mortgages, excluding legally vacant or abandoned properties. During the moratorium, a Mortgagee must not initiate or continue with an eviction to acquire possession of the foreclosed property. HUD anticipates that this extension will provide Borrowers additional time to access federal, state, or local housing stability resources or to consult with HUD-certified housing counselors. Foreclosure-related evictions of persons from properties that were secured by FHA-insured Single Family mortgages, excluding legally vacant or abandoned properties, are suspended through September 30, 2021. A Mortgagee must not initiate or continue with an eviction to acquire possession of the foreclosed property.
So, what does this mean to Labor? Well, to get the best understanding of how this all plays out, Foreclosurepedia spoke with a Senior Official at HUD whom broke it all down for us.
When we discussed the Justifications for HUD Management and Marketing (M&M) Field Service Management (FSM) 3.12 extensions, I requested some clarification,
You’re welcome. I like to “pull back the curtain” where I can, as a lot does go into the planning. I also don’t want to mislead, as inventory is still as low as it has ever been. Eventually, the inventory is going to start climbing though.
That’s the maximum allowable (aka ceiling) and is based on up to 12 months of performance. The ordering period has a 60 day base and a 6 month option to be used to cover us if/when 3.12 gets protested. Overall, performance could not extend under a Task Order for more than 12 months, so this assumes worst case scenario. Realistically, I anticipate award of 3.12 within the 60 day base period. Assuming we win the protests, we shouldn’t need more than 6 months total (GAO’s decision period is 100 days). However, the additional 6 months would be there to cover us in the off chance that we would lose or need to take corrective action.
The discussion continued,
I’m guessing you saw the fact that FHA extended the eviction moratorium, but not the foreclosure moratorium? What that means is HUD will start to process vacant inventory again, but will have to hold on any occupied foreclosures until the end of September.
Well and good. So, how does all of this translate with respect to the J&As which rolled out extending yet another 60 days the HUD M&M FSM 3.10 pending the HUD M&M FSM 3.12 Awards? And what about the Realignments? Both good questions! Here is how the extensions came down the pike,
HUD’s Office of Single-Family Housing, Office of Single-Family Asset Management has an urgent and compelling need to continue Field Service Management (FSM) services. HUD intends to extend contracts for 60-days for current FSM contractors in the areas listed below at their current Option Year pricing. The current contracts expire on May 31, 2021 and will be extended until July 31, 2021. The contract type is a hybrid (firm- fixed price/cost reimbursement), Indefinite Delivery/Indefinite Quantity contracts. The type of funds is annual Property Disposition (PD).
It should be noted that the 30 May 2021 extensions were all extended yet an additional 60 days — so, the first extension ended 31 July 2021 and the second extension would theoretically end 30 September 2021. This was the Justification for the actions,
The contract extensions are intended to provide FSM services while the FSM 3.12 procurement is underway.
To get an idea of the JA extensions — now in their second round — pricing, here was the actual costs related by HUD,
Contract Area 3A (IL), Contract Area 5A (NC, SC), Contract Area 6A (MS, AL, TN), Contract Area 7A (GA), Contract Area 1D (CO, NM, TX (North), UT), Contract Area 2D (AR, KS, LA, MO, OK, TX (South)), Contract Area 3P (CT, MA, ME, NH, NJ, NY, RI, VT), Contract Area 4P (OH), Contract Area 5P (DC, DE, MD, PA, VA, WV), Contract Area 3S (AZ), Contract Area 4S (ID, NV), Contract Area 5S (CA, HI, Guam), and Contract Area 6S (OR, WA, AK).
3A – $1,056,960.00, 5A – $445,336.00, 6A – $868,472.00, 7A – $648,368.00, 1D – $865,139.00, 2D – $1,642,730.00, 3P – $1,482,920.00, 4P – $777,836.00, 5P – $1,440,468.00, 3S – $652,376.00, 4S – $551,564.00, 5S – $1,344,776.00, and 6S – $816,824.00.
Roughly $24 Million has been issued out in the past two extensions, but that is not the big story, although the numbers bring into real world perspective what these contracts pay. What is the Big Story is whom is holding almost all of the Awards after HUD issued a Realignment — DGG dba Guardian Asset Management. In addition to all that they are currently maintaining, they have been issued 2A and 5A. Here is how HUD put it,
While DGG [Guardian Asset Management] is not the incumbent in 2D and 5A, DGG is the only known vendor that can reasonably perform the required services in areas 2D and 5A acceptably and without a break in service. Its performance across various FSM areas has been generally good over the past 12 months and there are no significant performance concerns. While a startup time is generally needed for a new awardee to enter a given FSM market, DGG is already operating in the Denver Homeownership Center (HOC) covering 2D and the Atlanta Homeownership Center (HOC) covering 5A. This allows for DGG [Guardian Asset Management] to begin performance in 2D and 5A with negligible transition time. DGG [Guardian Asset Management] has the resources, available key personnel, vendor network, and principal staff perform without any delays related to start up that could cause an interruption in services. In the last round of bridge contracts, it has shown an ability to pick up new areas within HOCs with little to no performance risk. Therefore, DGG [Guardian Asset Management] has the proven performance history and capability to perform these services within the time frame required with no degradation to the HUD mission.
The key statement to note, though, occurs later in the HUD J&A with respect to 2A,
Area 2D is located within the Denver HOC. DGG and the incumbent for 2D are the only FSM vendors operating in the Denver HOC. While there is an incumbent vendor in 2D, soliciting an offer from that vendor is not in the best interest of the government because of its performance in 2D. The risk of awarding to the incumbent is greater than the risk of awarding to non-incumbent DGG [Guardian Asset Management].
The HUD J&A for 5A is extremely telling,
Area 5A is located in the Atlanta HOC. The incumbent for 5A, one other FSM vendor and DGG are the only FSM vendors operating in the Atlanta HOC. While there is an incumbent vendor in 5A, soliciting an offer from that vendor is not in the best interest of the government because of its performance in 5A. The risk of awarding to the incumbent is greater than the risk of awarding to non-incumbent DGG. The other FSM contractor in the Atlanta HOC has acceptable performance in one area within the Atlanta HOC. However, historically that vendor does not have a record of satisfactory performance in new areas. Rather, it has generally failed to provide acceptable FSM service in new areas. Because of the urgency of HUDs need it is not practicable for HUD to explore the possibility that this vendor will successfully perform in 5A despite its past challenges in expanding to new areas. DGG [Guardian Asset Management] conversely has demonstrated success in performing in new areas many times. The risk of awarding to that vendor is greater than that risk of awarding to DGG [Guardian Asset Management].
The final one two punch was this statement from HUD,
HUD has determined that the incumbents in 2D and 5A are not potential sources because their respective performance over the last 12 months indicates they cannot successfully perform the required FSM work in these areas.
Curious about where this puts Guardian Asset Management with respect to domination within the HUD post conveyance marketplace? Well, there really isn’t any other competition. Guardian began servicing 3S and 5S in June 2017. On June 2019 Guardian was awarded 3A, 3P, 4S, 6S, and 1D through realignment based on satisfactory performance. On June 2021 Guardian was awarded Areas 4D, 5D, 1P, 4A and 8A through urgent and compelling sole-source actions based on their satisfactory performance. And now, 5A and 2D have been Realigned to Guardian. According to HUD JOTFOC documents, the below is how it stands today,
3A Illinois — Guardian
4A Indiana & Kentucky — Guardian
6A Alabama, Mississippi & Tennessee — Innotion Enterprises, LLC
7A Georgia — Alpine Companies, LLC
8A Florida, Puerto Rico & Virgin Islands — Guardian
1D Colorado, New Mexico, North Texas & Utah — Guardian
4D Iowa, Nebraska, South Dakota & Wisconsin — Guardian
5D Minnesota, Montana, North Dakota & Wyoming — Guardian
1P Michigan —Guardian
3P Connecticut, Massachusetts, Maine, New Hampshire, New Jersey, New York, Rhode Island and Vermont — Guardian
4P Ohio — BLM Companies, LLC
Foreclosurepedia reached out to HUD attempting to get clarity and the following was sent by a Senior HUD Official,
The ordering period has a 60 day base and a 6 month option to be used to cover us if/when 3.12 gets protested. Overall, performance could not extend under a Task Order for more than 12 months, so this assumes worst case scenario. Realistically, I anticipate award of 3.12 within the 60 day base period. Assuming we win the protests, we shouldn’t need more than 6 months total (GAO’s decision period is 100 days). However, the additional 6 months would be there to cover us in the off chance that we would lose or need to take corrective action.
Below are the HUD documents wherein this article was based upon for those whom desire a deeper dive.
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