Work on the nation's "HUD homes” hums in a nondescript office building in southwest Oklahoma City.
For homes headed out of foreclosure and into the hands of the U.S. Department of Housing and Urban Development — anywhere in the United States — all bureaucratic roads lead through the building, where 75 people work 12 hours a day, five days a week, processing them.
"HUD homes,” they're called — for their hopeful seller: HUD.
The Federal Housing Administration, an arm of HUD, insures millions of mortgage loans. When homeowners default on those loans, the homes go into foreclosure, HUD pays off the loans and takes possession of the houses. Before HUD can try to market them, they have to be processed to make sure that the lenders and loan servicers have conveyed the properties to HUD in acceptable condition.
And it all happens at 4400 Will Rogers Parkway, Suite 300, where Michaelson, Connor & Boul Inc., based in Huntington Beach, Calif., has sorted through mortgage messes since March.
HUD contracted with the firm to act as mortgagee compliance manager, under supervision of HUD's National Servicing Center here.
"This new contract is part of FHA's continuing effort to reduce risk, increase return, and improve efficiency in the resale of its inventory of foreclosed property,” said HUD Deputy Assistant Secretary Vicki Bott. "It is critically important that FHA recaptures as much of our claims through the eventual sale of these properties and this compliance management firm will help us do that.”
HUD has subcontracted foreclosed inventory processing to the private sector since 1999. However, this is the first time a single firm has taken on all the work. HUD said it contracted with Michaelson, Connor & Boul "to streamline its operations, capitalize on the expertise of potential vendors and provide flexibility in a changing environment.”
The firm handled about 9,800 acquisitions in March, 8,000 in April and 7,000 in May, said Kerry Neterer, executive director.
Foreclosures in general, not just of HUD homes, appear to have peaked, although some insiders think it's a temporary lull.
In any case, with 12,900 square feet leased at Will Rogers Office Park — northeast of Meridian Boulevard and SW 25 — Neterer said Michaelson, Connor & Boul can easily take on more work and has space for up to 50 more employees.
HUD acquisitions take scrutiny before they're ready to market, said Mary Berry, broker-owner of Century 21 All Pro Realty in south Oklahoma City, one of two real estate agents in Oklahoma authorized to handle the sale of HUD homes.
As of Thursday, she said she had 74 HUD homes listed for sale, 91 under contract and 55 in the premarketing stage.
The other HUD agent is Stan Miller, broker and co-owner of Century 21 Clinkenbeard Group with offices in Moore, Muskogee and Fort Gibson. Miller said he had 65 HUD homes listed, 111 under contract and 51 in the pipeline.
"We're hoping to cut down the time” between acquisition and marketing, Berry said. "If we can catch (clouded titles or damaged property) up front, it'll be a lot easier.”