RISMEDIA, January 5, 2011—To better oversee the maintenance and sales of foreclosed FHA homes, the U.S. Department of Housing and Urban Development has deployed the REO Performance Evaluation Model developed by Walzak Consulting Inc. in its Management and Marketing III (M&M III) program for HUD field service manager and asset manager contractors, the organization has announced. The Performance Evaluation Model measures and tracks the performance of HUD’s REO vendors in meeting and following the department’s contractual requirements and operational procedures.
According to the organization, HUD’s M&M III program has very specific requirements for how REO vendors are to manage, maintain, market and sell foreclosed FHA single-family homes. The Performance Evaluation Model, developed by Walzak Consulting, a provider of consulting services on operational and enterprise risk management for both the origination and servicing of loans, measures how effectively the vendors followed HUD’s guidelines, whether their costs were reasonable and their reliability was good.
“HUD wanted to do a better job of managing its REO properties to get a better return,” said Rebecca Walzak, president of Walzak Consulting. “The Performance Evaluation Model measures how well HUD’s REO vendors perform against the department’s guidelines. Did the vendors take the required steps and if not, how did their performance impact HUD’s REO inventory and return on assets? HUD uses the model to create incentives: The better vendors perform in a reliable manner and at lower costs, the more properties they get to manage for HUD.”
To implement the Performance Evaluation Model, HUD delivered its data set and REO vendor requirements to Walzak Consulting to plug into the model, creating a unique monitoring tool for the M&M III program. The model gives HUD the ability to understand what is driving the results when measuring vendor performance, and if performances are inadequate, where and how the contractor program should be changed.
Walzak Consulting partnered with MasterServ Financial of Malvern, Pennsylvania in developing the technology component of the REO Performance Evaluation Model. MasterServ Financial develops analytics and technology for the financial services industry.