In an effort to improve the system of maintaining and selling its inventory of homes under foreclosure, the Department of Housing and Urban Development (HUD), has recently dished out 55 new contracts, 23 of which are to companies serving as asset managers. The other 32 will act as field service managers.
These changes fall under the umbrella of the management and marketing program’s third generation—M&M III. In the past, M&M contractors held both maintenance and marketing responsibilities for the HUD’s REO properties. Now, with the divvying up of key duties, according to HUD, the success of HUD’s asset disposition program will greatly improve. Since 1999, the department has outsourced the disposition of its foreclosed FHA inventory.
HUD Secretary, Shaun Donovan said, “these new contracts epitomize FHA’s continuing effort to reduce risk, increase net returns, decrease holding times, and improve efficiency in the resale of its inventory of foreclosed properties.” said. He later added, “…it is critically important that FHA successfully and efficiently sell its inventory of these properties, and these contractors will help us do that.”
The current inventory of foreclosed FHA property includes roughly 44,000 homes. HUD says the new system will prove helpful in tackling this situation. 44,000 homes is up from the average of 35,000-40,000.
Under the new structure, field service managers will oversee property maintenance and preservation, while asset managers are responsible selling homes. HUD said there will be multiple field service and asset manager contractors in many areas. In effect, this will foster competition amongst contractors as responsiveness should improve, risks reduced, and net returns increase. The HUD, projects 1,200 new jobs throughout the country.