FHA Management and Marketing Structure (M&M III)
In 2010, HUD launched the third generation of its Management and Marketing (M&M) program, known as M&M III. These new contracts streamline HUD's operations, capitalize on the expertise of its potential vendors, and provide flexibility to meet changing market conditions in the REO industry.
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 will be one Mortgagee Compliance Manager located in Oklahoma City, Oklahoma. HUD's National Servicing Center will have direct oversight over the Mortgage Compliance Manager. There will be one Field Service Manager and one Asset Manager contractor in an area. Each contractor will establish 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. A map of all M&M III contract areas is available here.
The key elements of the disposition structure include:
- Mortgagee Compliance Manager (MCM)
- Field Service Manager (FSM)
- Asset Manager (AM)
Mortgagee Compliance Manager (MCM)
The Mortgagee Compliance Manager (MCM) 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 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.
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.
For further information, please visit the FHA Resource Center.
M&M III Federal Register Notice
Federal Register, Vol. 75, No. 226, Wednesday, November 24, 2010 Policies and Procedures Pertaining to Changes in Listing Brokers Participating in the Federal Housing Administration (FHA) Management and Marketing III Program
M&M III Reference Materials
- Read about HUD's Mortgagee Compliance Manager