FHA Management and Marketing Structure (M&M III)

On August 30, HUD launched the third generation of its Management and Marketing (M&M) program, known as M&M III. These new contracts will 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 Field Service Managers will be responsible for property maintenance and preservation and the Asset Managers will be responsible for the sale of the homes. There will be multiple Field Service Manager and Asset Manager contractors in most areas. This is expected to foster competition among the contractors thereby improving responsiveness, reducing risk and increasing net returns to the agency. 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 will be responsible for the direct oversight of the new contracts 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 Manager (FSM)

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 will be assigned to FSMs. There will be multiple contracts awarded through each HOC, with the FSMs competing for new acquisitions through their respective HOCs.

	FSM Awardees Contact Information
	FSM Toll Free Numbers

Asset Manager (AM)
The AMs are responsible for the marketing and sale of REO property. Multiple AMs will be contracted to market HUD-owned properties within their selected contract area within their geographic HOC areas. FHA property listings and property agent contact information are available at HUD's new REO listing site, HUD Home Store.

	AM Awardees Contact Information
	AM Toll Free Numbers

Please direct any questions to the FHA Office of Single Family Asset Management at (202) 708-1672.