The U.S. Department of Housing and Urban Development (HUD) today awarded contracts to 23 companies to serve as asset managers and 32 firms to serve as field service managers under the third generation of its management and marketing program (M&M III). The new contracts splits maintenance and marketing functions, HUD said. Previously M&M contractors were responsible for both maintenance and marketing of REO properties. Last month, HUD released guidance on its property preservation requirements under M&M III for defaulted Federal Housing Administration (FHA)-insured mortgages. “These new contracts epitomize FHA’s continuing effort to reduce risk, increase net returns, decrease holding times and improve efficiency in the resale of its inventory of foreclosed properties,” said HUD Secretary Shaun Donovan, in a prepared statement. “It is critically important that FHA successfully and efficiently sell its inventory of these properties and these contractors will help us do that.” The separation of the two functions recognizes that each requires significantly different skill sets, HUD said in a news release. HUD’s current inventory of foreclosed FHA property is approximately 44,000 homes, up from the usual average level of 35,000 to 40,000. HUD has been outsourcing the disposition of its foreclosed FHA inventory under the M&M contracting process since 1999. Its new M&M III disposition structure is designed to streamline its operations, capitalize on the expertise of potential vendors and provide flexibility. Under the new contracts, field service managers will be responsible for property maintenance and preservation, and asset managers will be responsible for home sales. Most areas will have multiple contractors, a move expected to foster competition and improve responsiveness. More than 99% of the houses are unoccupied at the point that they go to M&M contractors, a HUD spokesman said. The contracts are projected to create 1,200 new professional jobs nationwide. The list of awardees for each area is available on the HUD website. Write to Kerry Curry