Ga. firm gains HUD contract

Intown to sell homes under foreclosure in $74 million pact

`We're focused and ... fast'

Golden Feather loses hold after working on pilot program

Housing

February 07, 1999|By Robert Nusgart | Robert Nusgart,SUN REAL ESTATE EDITOR

After running a two-year pilot program of selling government-foreclosed homes in the Baltimore metropolitan area, Golden Feather Realty Service is being replaced.

Last week, the Department of Housing and Urban Development announced that Atlanta-based Intown Management Group LLC has been awarded a multimillion dollar, five-year contract to manage and market homes in Maryland on HUD's behalf.

The contract was one of 15 that was awarded by the department as the experiment in having private companies sell HUD homes is expanded nationwide. The contract covers Maryland, Washington, Virginia and West Virginia. The firm also was awarded contracts in six other HUD designated areas that cover 24 states.

"Obviously it's disappointing, we feel we were very competent," said Golden Feather vice president and Baltimore manager Shelagh N. Davidson. "But we wish them lots of luck. We enjoyed our stay."

James S. Kelly, spokesman for the Baltimore HUD office, did not elaborate on why Intown was selected over Golden Feather.

"I don't know the specifics whether the quality of the provider and the quality of the service was the same or if Intown was cheaper. Or they thought that Intown was offering them different or better services, or if it was a quality issue," Kelly said. "[HUD] didn't shut out Golden Feather across the board."

Golden Feather's only winning bid to sell HUD-foreclosed homes came in California.

Davidson said not being able to continue in the Maryland area was surprising, since "we felt we had a pretty good idea of what the cost and expenses would be and we bid accordingly."

According to Intown spokeswoman Denise Reed, the firm has done contracting for the U.S. Army and the single-family and multifamily divisions of HUD. With the new contracts, she said the company's employee base would expand to 300 nationwide.

"Certainly, we think the fact that we were successful really had as much to do with the fact that we have previous experience in this type of industry -- both in terms of our corporate experience and in terms of the staff we have presented to HUD -- to perform this type of work," Reed said. "We think that we have a good reputation in this kind of business."

Reed noted that the HUD selection process was based on several factors -- not just lowest bid.

"It is a `best value' procurement," Reed said. "They first select only those companies that have a very good background and who can do the work. And then after that they look at the prices that are bid. The successful contractor is a combination of past performance and price."

Reed said the company's contract -- valued in this area for almost $74 million -- begins March 29.

"I think there are going to be some changes in the way [the program] is going to be operated," said HUD's Kelly.

HUD gains ownership of homes with mortgages insured by the Federal Housing Administration when those homes go into foreclosure. HUD pays off the balance of the mortgage and attempts to sell the home.

Kelly said Intown will be responsible for taking over the properties, securing them and maintaining them as well as ordering appraisals, pricing the properties, receiving and selecting bids, and supervising the sales closings.

"Our top priority is to make sure that everyone who is involved with this program, both for HUD and the community, is kept happy and we do our job and we do it well. We're focused and we're fast," Reed said.

Two years ago, the HUD office in Baltimore -- which serves every Maryland jurisdiction except Prince George's and Montgomery counties -- was selected with those in New Orleans and Sacramento, Calif., to participate in a trial program that would turn over marketing and managing to a private company with hopes of increasing single-family home sales and cutting costs to the government.

In that bidding process, San Antonio-based Golden Feather beat Intown Management Group, according to Reed.

Golden Feather reported that it sold 1,443 homes for fiscal year 1997, which ended Sept. 30, compared with 993 homes sold in fiscal 1996 and 895 in 1995. Davidson said Golden Feather surpassed its sales goal for fiscal 1998 by selling 1,450 homes.

"HUD has always been satisfied with our performance. Remember, we were a pilot program," Davidson said. "The only reason they expanded these contracts is because of what we have done. The Realtor base has been satisfied with our level of service."

Not everything ran smoothly for Golden Feather during its tenure.

In July 1997, an auction of 144 HUD homes was canceled, angering hundreds of homebuyers, after it was learned that low-down-payment FHA financing would not be offered. The auction was rescheduled two weeks later when HUD reversed its policy.

Pub Date: 2/07/99

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