3.12 FIELD SERVICE MANAGEMENT

The Federal Housing Administration (FHA), an organizational unit within HUD, administers the single-family mortgage insurance program. FHA insures approved lenders against the risk of loss on mortgages obtained with FHA financing. In the event of a default on an FHA insured loan, the lender acquires title to the property by foreclosure, a deed-in-lieu of foreclosure, or other acquisition method, files a claim for insurance benefits and conveys the property to HUD. As a result of acquisitions through the mortgage insurance program and other programs, HUD has a need to manage and sell a sizable inventory of single-family homes in a manner that promotes home ownership, preserves communities, and maximizes return to the FHA insurance funds.

HUD administers the REO disposition program through four (4) Homeownership Centers (HOCs) located in: Philadelphia, Pennsylvania; Atlanta, Georgia; Denver, Colorado; and Santa Ana, California. Each HOC is responsible for a designated geographic area. Within each HOC there will also be designated contract areas for Field Service Managers.

Since 1999, HUD has been outsourcing the disposition of its REO inventory to Management and Marketing (M&M) Contractors. To ensure the continued success of its disposition program and to further capitalize on the disposition expertise of the private sector, in 2007, HUD conducted extensive market research on industry best practices surrounding the REO asset disposition process to structure the third generation of the contracting program, herein after referred to as M&M III. This acquisition, like the previous Management and Marketing 3.10, is part of the third generation of M&M services. Based on a history of market research results from M&M III, HUD has continued to develop a disposition structure for the management and marketing of REO inventory that will streamline its operations, capitalize on the expertise of its potential Contractors, and provide flexibility to meet changing market conditions in the REO industry.