Matt Martin and HUD have Fall Out??, I am getting all kinds of chatter from some fairly reliable sources that say Matt Martin and HUD are having some sort of tiff / fall out. Apparently, what I could find is that back in 2010, Matt Martin filed a lawsuit against the Fed but, apparently some later developments have happened that I need some more, anyone know anything and are willing to share publically? If not, send me an email to and I will keep my sources confidential.

Note, I have attached, what I believe to be the documents from the lawsuit back in 2010 as a pdf below you can read.


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  • I must take issue with your response Jason to Bruce Ailion and HUD. He was just being very up front with how he saw the situation. Over the years HUD has had issues with contracts being let, hence the near constant change in vendors. The good ole boy system rolls on.

  • Wow.....


  • UPDATE! From a very reliable confidential source who emailed me requesting his / her information be kept confidential.

    Jane Doe # 2,....


    "HUD made numerous mistakes on this procurement. I can’t get into details but it appears that when one of the companies was disqualified, the principal flew to Atlanta and was granted a private one on one discussion with Craig Karnes. It appears a lot of “qualified” information was shared with him. He then filed a GAO protest using this information. HUD agreed to take "Corrective Action” and his protest was withdrawn. He was then let back into the competitive range… BAFO (Best and Final Offer)...using the information he received from his private discussion…it appears he took advantage and the rest is history. The problems go much, much deeper but I would guess that between the GAO & SBA protest, we’re looking for the first of the year before any decisions are made.  There is currently two stays, one from SBA and one from the GAO."


    For more information on the web you can visit the GAO site below.....


    • It is true that when a company gets disqualified, they have the right to sit down and determine why.  In the M&M3.5 award bids for Arizona and California, I do know that in the original decision they through out companies for stupid reasons like, they didn't realize there were more columns to their spreadsheet.   So those companies had the right to appeal and be re-considered.  That is why there are so many "rounds" for this.


      We work for Pemco and Hometelos and I do know that assets are down all over the country since HUD has started selling non performing notes in pool sales prior to foreclosure.

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  • Excellent feed back.  I buy from HUD and frankly am thrilled by the low quality asset management and listing representation.  With the realignment of master contracts, I considered becoming a HUD broker but the limitation on listing brokers purchasing from HUD was a deal killer.  Every time I make a ton of money flipping a HUD home, I feel bad as a taxpayer but it doesn't stop me from cashing the check. It appears HUD, their asset managers, and listing agents are working hard to make HUD the seller of last resort.  Keep it up it just makes me more money.

    • I have read some really outlandish posts from all different types of people in my time, but your post, Bruce Ailion, is just out there.  I suspect the way you badmouth HUD you will never be a HUD LLB. I further suspect you have some ulterior motive for speaking the way you do about HUD; perhaps you simply were not chosen as one of their LLBs by one of their outsourcers. Finally, I doubt anyone here cares much about every time you make a ton of money or that you have no problem cashing their checks.  Unfortunately you come off as a severely unprofessional agent and if you are a REALTOR, I'm almost embarrassed to say that we belong to the same organization.

  • If you look at their website, there aren't any HUD properties listed. There are a few MMREM managed HUD properties active in our MLS, but nowhere near the quantity that there was previously.


  • a little bit of an update. I got an interesting email but, I don't know if it has anything to do with my original post. I am posting it because, I think it may provide a little back story to what is happening now.


    NOTE: I did remove her / his name and any identifying information. I will keep her / his information confidential so, please don't ask who she / he is. I did have to change the story up a little so that I kept her / him confidential.


    So, Jane Doe sends me an email and says....


    While I don't have direct knowledge of this lawsuit, I can provide some possible background information that may be relevant.  Our firm listed property for HUD when a company called HomeSource had the HUD Contract.  HomeSource lost its contract with HUD when HUD decided to use a small number of servicers who could handle national accounts as opposed to the regional approach HUD used in the past. "In the old days" HomeSource paid the listing agent $300/listing to put up a sign, put on a lockbox, and place the property in MLS. Buyer's agents could earn up to 5-6% on the sale.  With the consolidation of servicers, HUD changed it's payment structure with both the listing and selling brokers earning 3% each. It was at this time the Matt Martin and a few others were awarded the servicing contracts.  Matt Martin then devised an arduous application process for agents/brokers to get on their approved list to service listings. Only one agent/office was allowed.


    HomeSource also sued HUD when they lost the contract, claiming, among other things, that Matt Martin had hired former HUD employees to advise them.  HUD's regulations always prohibited the servicing contractor from having any financial benefit as the result of referring listings to brokers/agents, such as a referral fee or kickback.  The Master Lisitng Agreement between the servicer and the broker spells this out.  But, Matt Martin's firm added a "hidden" addendum to the HUD Master Listing Agreement in which the referred broker agreed to pay one-third of the brokerage fee (1% of the total 3% fee) to Matt Martin on each listing referred at closing.


    A few years ago, and following the awarding of a HUD contract to Matt Martin, I received a phone call from an investigator from HUD.  Apparently, there were a lot of complaints about the long delay of HUD homes coming on the market and other practices of the servicer(s).  I explained to the investigator about the fee being charged by Matt Martin to brokers and provided her with a copy of the agreement I received from Matt Martin.  HUD was holding hearings at the time.


    So, perhaps, Matt Martin cooked his own goose by being greedy and failing to follow HUD's guidelines.  He may be lucky that he's not in jail."

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