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: