HUD's $343.6M Master Subservicer Contract Awarded to Carrington Mortgage Services LLC

Contract Overview

Contract Amount: $343,639,623 ($343.6M)

Contractor: Carrington Mortgage Services LLC

Awarding Agency: Department of Housing and Urban Development

Start Date: 2014-02-10

End Date: 2019-08-09

Contract Duration: 2,006 days

Daily Burn Rate: $171.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: SINGLE FAMILY MASTER SUBSERVICER IGF::OT::IGF

Place of Performance

Location: ANAHEIM, ORANGE County, CALIFORNIA, 92806

State: California Government Spending

Plain-Language Summary

Department of Housing and Urban Development obligated $343.6 million to CARRINGTON MORTGAGE SERVICES LLC for work described as: SINGLE FAMILY MASTER SUBSERVICER IGF::OT::IGF Key points: 1. The contract, valued at $343.6 million, was awarded under full and open competition. 2. Carrington Mortgage Services LLC secured this significant contract, indicating strong market presence. 3. The contract duration spans over five years, presenting potential long-term financial commitments. 4. This award falls under the 'Investment Banking and Securities Dealing' NAICS code, suggesting specialized financial services.

Value Assessment

Rating: good

The contract's firm fixed price structure provides cost certainty. Benchmarking against similar master subservicing contracts would be beneficial to fully assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, suggesting a robust price discovery process. This method typically leads to more competitive pricing.

Taxpayer Impact: The firm fixed price contract aims to control costs, but the total value of $343.6 million represents a substantial taxpayer investment in mortgage servicing.

Public Impact

Ensures continued servicing of single-family mortgages, maintaining stability for homeowners. Supports the Department of Housing and Urban Development's mission in managing its mortgage portfolio. Provides employment opportunities within the mortgage servicing industry. The large contract value highlights the significant role of private sector entities in government functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if servicing demands exceed initial projections.
Reliance on a single vendor for critical mortgage servicing functions.
Contract duration may not align with evolving market conditions or technological advancements.

Positive Signals

Awarded through full and open competition, suggesting competitive pricing.
Firm fixed price contract provides cost predictability.
Established vendor with experience in mortgage servicing.

Sector Analysis

This contract falls within the financial services sector, specifically related to mortgage servicing. Benchmarks for similar government contracts in this area are typically based on portfolio size and complexity of services.

Small Business Impact

The contract was awarded through full and open competition and does not indicate specific set-asides for small businesses. Further analysis would be needed to determine if small businesses were involved as subcontractors.

Oversight & Accountability

The Department of Housing and Urban Development is responsible for overseeing this contract. Standard oversight mechanisms would include performance reviews and financial audits to ensure compliance and effectiveness.

Related Government Programs

Investment Banking and Securities Dealing
Department of Housing and Urban Development Contracting
Department of Housing and Urban Development Programs

Risk Flags

Contract duration may be too long, leading to potential inefficiencies.
Lack of specific small business participation noted.
Reliance on a single entity for critical servicing functions.
Potential for performance issues if contractor's capacity is exceeded.

Frequently Asked Questions

What is this federal contract paying for?

Department of Housing and Urban Development awarded $343.6 million to CARRINGTON MORTGAGE SERVICES LLC. SINGLE FAMILY MASTER SUBSERVICER IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is CARRINGTON MORTGAGE SERVICES LLC.

Which agency awarded this contract?

Awarding agency: Department of Housing and Urban Development (Department of Housing and Urban Development).

What is the total obligated amount?

The obligated amount is $343.6 million.

What is the period of performance?

Start: 2014-02-10. End: 2019-08-09.

What is the specific scope of services included in the 'SINGLE FAMILY MASTER SUBSERVICER' role?

The 'SINGLE FAMILY MASTER SUBSERVICER' role typically involves managing all aspects of mortgage loan servicing, including payment collection, escrow management, default management, loss mitigation, and foreclosure processing for a portfolio of single-family mortgages. This ensures timely and accurate handling of borrower accounts and adherence to regulatory requirements.

What are the key performance indicators (KPIs) used to evaluate Carrington Mortgage Services LLC's performance under this contract?

Key performance indicators likely include metrics such as timely payment processing, accuracy of escrow account management, borrower satisfaction rates, default and delinquency rates, and successful loss mitigation outcomes. Regular performance reviews against these KPIs would be crucial for ensuring the contractor meets HUD's service level expectations.

How does the firm fixed price contract structure mitigate risks associated with fluctuating interest rates or market volatility in the mortgage industry?

A firm fixed price contract shifts the risk of cost overruns due to market fluctuations to the contractor. While this provides budget certainty for HUD, it requires Carrington Mortgage Services LLC to accurately forecast costs and manage risks associated with interest rate changes or market volatility within their proposed price.

Industry Classification

NAICS: Finance and Insurance › Securities and Commodity Contracts Intermediation and Brokerage › Investment Banking and Securities Dealing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: DU100G-12-R-0007

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1610 E SAINT ANDREW PL STE B150, SANTA ANA, CA, 92705

Business Categories: Category Business, Corporate Entity Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $343,639,623

Exercised Options: $343,639,623

Current Obligation: $343,639,623

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline