The U.S. Department of Housing and Urban Development has fired the property-management company that struggled to maintain and sell government homes throughout Western New York this summer.
InTown Management Group was dumped by HUD Wednesday as property manager in New York and 19 other states. The Atlanta-based property-management group began a multiyear contract earlier this year to manage and market foreclosed Federal Housing Administration homes.
The company was the subject of numerous complaints in Buffalo and other cities because properties were slow to be listed, debris was not removed from many homes and published bidding rules were loosely enforced. "They were the most inept group going," said Mike Smith, an agent with Metro Ken-Ton. "They didn't even return phone calls. You got a voice mail system and they never called back. It was hopeless trying to find information about where deals stood."
InTown Management executives did not return phone calls to their Atlanta office.
HUD announced Thursday it will attempt to replace InTown with another group within a week. The agency will suspend all listings of FHA properties until a new property manager is operating.
Rep. John J. LaFalce, D-Town of Tonawanda, praised HUD for acting decisively in dumping the contractor. "I am pleased that HUD has moved quickly and decisively in response to the request I made last month to either correct the apparent deficiencies of InTown Management as HUD property disposition agent in Western New York, or to exercise their right to terminate the contract because of these deficiencies," LaFalce said.
Several local realtors said they are concerned the transition of property files from one private contractor to another will create more delays and problems.
HUD owns 321 houses in Erie County. The agency takes title to properties when homeowners default on mortgages insured by the Federal Housing Administration. A "small backlog" of foreclosures developed while InTown was in charge, local HUD officials said.
One of the biggest complaints against InTown from local real estate brokers was the handling of bids. For example, InTown announced the sale of 505 Hinman Ave. in Buffalo for $13,050 on Sept. 16 when Century 21-Balesteri had a confirmed bid of $13,300.
Nick Balesteri said his client, who intended to live in the house, was highly upset at losing to a lower bidder. Balesteri said InTown was generally "incompetent."
HUD employees used to handle management and marketing of foreclosed properties. The agency decided to switch to contractors to bring in private sector expertise and slash the number of federal government jobs.
Smith said he thinks HUD would be better off reversing ground and bringing the work back in-house.
"They did a fabulous job when they were handling the foreclosures. They got them on the market and we sold them. They had it down to a science," Smith said.