The US Department of Housing and Urban Development
(HUD) is pushing forward with plans to speed up the management and marketing (M&M) of properties in order to create a more orderly return of the property to livability and, subsequently, sale-ability.
The new and multi-faceted approach will aid servicers to quickly reclaim expenses from Federal Housing Administration
(FHA)-insured properties in the event of short sale, foreclosure, etc. The changes will also apply to properties where there is still an occupant, protected by the Tenant Act, which states that, even if a borrower defaults, the servicers must honor the leaseholders' agreement in non-owner occupied scenarios.
Under the new M&M guidelines, representatives from HUD said at a three-hour panel at the Safeguard Properties
' National Property Preservation Conference underway in Washington DC, that servicers should take the risk and get any necessary work done on the property, without submitting a bid for approval first. HUD will then verify that claim and repay the servicer for the expense.
HUD is also releasing a massive computer program, the P260, created by property management software provider, Yardi
, and using the Marshal and Swift
database for approvals, that will make expense submissions entirely electronic. This is opposed to the current method of "by phone, by fax, by postal courier," as one panelist put it.
"Go ahead and do what you have to do," said James McGee, a single family housing program policy specialist for HUD. M&M Contractors market and manage single-family properties owned by, or in the custody of the Department. HUD also noted that its P260 reps will be trained by day one, with the launch coming sometime in 2010 and expects the transition to be relatively easy.
Safeguard Properties CEO Robert Klein applauded the move of HUD to modernize its operations, though Michelle Stevens-Schultz, a mortgage officer at JP Morgan Chase
[stock JPM][/stock] worries that bids currently being considered may be sidelined without recompense once the new submission process goes online.
"We are still working on the transition," said McGee.
Write to Jacob Gaffney