What Is HUD and What Does It Have to Do with the Foreclosure Cleanup Industry
HUD is the Department of Housing and Urban Development. The Federal Housing Administration (FHA) is part of the organization.
The FHA provides mortgage insurance to specifically reimburse mortgage lenders if a buyer defaults on their mortgage. Lenders can file a claim with the FHA when they are forced to foreclose on an FHA-insured home because the owner has defaulted on the payments. The FHA will reimburse the balance due on the mortgage and convey title of that property to the Department of Housing and Urban Development, following certain rigid rules and regulations.
Simply put, a "HUD Home" is a residence acquired as a result of foreclosure on an FHA-insured mortgage loan. When these homes are foreclosed on (and it's happening in record numbers), someone has to inspect, cleanup, secure and manage them through the selling process.
With the number of foreclosures on the market today held by the organization, property management has become an incredible task for the Department of Housing and Urban Development. The organization has a need to manage and sell a sizable inventory of single-family homes like never before.
HUD's Foreclosure Cleanup Arms
The organization has arms in the form of M&M Contractors ("Management and Marketing" Contractors). These M&M Contractors market and manage single-family properties owned by, or in the custody of, HUD.
As a foreclosure cleanup business owner, you need to know the M&M's role because their payment guidelines, mandated by the organization, directly affect what you ultimately get paid in your foreclosure cleanup business.
The Department of Housing and Urban Development didn't begin outsourcing the disposition of these properties to the private sector until 1999.
The organization currently has contracts with several firms who provide M&M services in several contract areas throughout the United States, Puerto Rico, the Caribbean, Guam and the Northern Marianna Islands. The organization has an ongoing need for these services and is building on the success of their existing outsourcing program.
The Frontline
The M&M Contractors are part of the frontline when it comes to managing these properties.
The M&Ms report to one of four HUD Homeownership Centers (HOC). HOCs are located in Philadelphia, Pennsylvania; Atlanta, Georgia; Denver, Colorado; and Santa Ana, California. Each HOC is responsible for a designated geographic area.
M&M Contractors are administered by a Contracting Officer (CO) and a Government Technical Representative (GTR) located in the Homeownership Center to which they report.
Remember, as a foreclosure cleanup business owner, you need to know the M&M's role because their payment guidelines, mandated by the Department of Housing and Urban Development, directly affect what you ultimately get paid in your foreclosure cleanup business. Even if you are not dealing with the organization's homes in great numbers now, their pricing guidelines trickle down in the property preservation industry "pricing expectations."
Good luck with your foreclosure cleanup business!
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Blog by Cassandra Black
Follow Cassandra Black on Twitter: http://twitter.com/foreclosuredirt
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