In an effort to improve the system of maintaining and selling its inventory of Federal Housing Administration[IMAGE]
(FHA) foreclosed homes, ""HUD"":http://portal.hud.gov/portal/page/portal/HUD has awarded 55 new contracts - 23 to companies who will serve as asset managers and 32 to companies who will serve as field service managers - under the third generation of its management and marketing program, known as M&M III.
Under prior agreements, M&M contractors were responsible for both the maintenance and marketing of HUD's REO properties, the department said. But those functions are separated under the new contracts announced Monday.
According to HUD, maintenance and marketing responsibilities require significantly different skill sets. So splitting up these functions between two different types of companies will thereby increase the effectiveness of HUD's asset disposition program, the department explained.
[COLUMN_BREAK]""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 HUD Secretary Shaun Donovan. ""It is critically important that FHA successfully and efficiently sell its inventory of these properties, and these contractors will help us do that.""
HUD has been outsourcing the disposition of its foreclosed FHA inventory under the M&M contracting process since 1999. The department said it developed the new M&M III disposition structure in order to streamline operations, capitalize on the expertise of potential vendors, and provides flexibility in a changing environment.
Currently, HUD's inventory of foreclosed FHA property is approximately 44,000 homes, up from the usual average level of 35,000 to 40,000. However, the department said its new system of separating the functions of maintaining and selling properties will help it deal with this challenge.
Under the M&M III, field service managers will be responsible for property maintenance and preservation, and asset managers will be responsible for the sale of homes. HUD said there will be multiple field service manager and asset manager contractors in most areas, which is expected to foster competition among the contractors and thereby improve responsiveness, reduce risk, and increase net returns to the agency.
According to HUD, these awards are expected to create 1,200 new professional jobs nationwide.