HUD’s Role in Paying Foreclosure Cleanup Businesses
What is HUD?
HUD is the Department of Housing and Urban Development. The Federal Housing Administration (FHA) is part of HUD.
The FHA provides mortgage insurance to specifically reimburse mortgage lenders if a buyer defaults on their mortgage. Lenders can file a claim with the FHA when they are forced to foreclose on an FHA-insured home because the owner has defaulted on the payments. The FHA will reimburse the balance due on the mortgage and convey title of that property to HUD, following certain rigid rules and regulations.
Simply put, a “HUD Home” is a residence acquired as a result of foreclosure on an FHA-insured mortgage loan. When these homes are foreclosed on (and it’s happening in record numbers), someone has to inspect, cleanup, secure and manage them through the selling process.
With the number of HUD foreclosures on the market today, property management has become an incredible task for HUD. The organization has a need to manage and sell a sizable inventory of single-family homes like never before.
HUD’s Foreclosure Cleanup Arms
HUD has arms in the form of M&M Contractors (“Management and Marketing” Contractors). These M&M Contractors market and manage single-family properties owned by, or in the custody of, HUD.