We reviewed 32 Federal Housing Administration (FHA) loans that New Day Financial, LLC, underwrote as a U.S. Department of Housing and Urban Development (HUD) FHA direct endorsement lender. We conducted the review as a result of a risk model assessment that identified mortgage lenders that were at high risk to cause losses to the FHA insurance fund. New Day was one of the lenders identified that made insurance claims within the first 2...

We completed a corrective action verification of a recommendation made to the U.S. Department of Housing and Urban Development’s (HUD) Office of Public and Indian Housing (PIH) pertaining to our review of the City of Hawthorne, CA’s Section 8 program, Audit Report 2011-LA-1008, which was issued March 28, 2011. The purpose of the corrective action verification was to determine whether HUD officials appropriately closed audit...

We conducted an evaluation of the U.S. Department of Housing and Urban Development’s (HUD) toll free phone lines.  Our objective was to determine whether HUD’s phone lines were functioning at optimal levels with regard to phone line operations and the level of customer service provided to the public. Our review disclosed that HUD could not determine (1) whether its toll free phone lines were functioning at an optimal level and...

We conducted a limited review of Federal Housing Administration (FHA) loans underwritten by Standard Pacific Mortgage, Inc. We selected the lender based on the results of an auditability survey, which determined that Standard Pacific Mortgage allowed prohibited restrictive covenants to be filed against FHA-insured properties. The objective of our review was to determine the extent to which Standard Pacific Mortgage failed to prevent...

We completed a review of Deutsche Bank’s Job Creation and Retention Program (JCRP) grant. We selected this auditee based on a hotline complaint, case number HL-2012-0199, that was referred from the United States Government Accountability, FraudNet control number 58392, received on November 23, 2011. The complaint alleged that Deutsche Bank officials fraudulently received a $34.5 million JCRP grant under the guise that they would...

We conducted a limited scope review of the Philadelphia Housing Authority based on questions surrounding the abrupt departure of the Authority’s executive director in June 2012. Our objective was to determine whether the Authority’s executive director improperly used U.S. Department of Housing and Urban Development (HUD) funds by providing improper gifts or unsupported promotions to a senior staff member with whom he had an improper...

We audited Prysma Lending Group, LLC, a nonsupervised lender, located in Danbury, CT, in support of the U.S. Department of Housing and Urban Development (HUD), Office of Inspector General’s (OIG) goal of improving the integrity of the single-family insurance program. We selected Prysma for audit because its 3.28 percent default rate for Federal Housing Administration (FHA)-insured single-family loans with beginning amortization dates...

We have completed a review to determine whether HUD followed proper policies and procedures in responding to a breach of personally identifiable information which occurred on September 21, 2012. Specifically, for this incident, we identified what actions were taken and any deficiencies within HUD policies, plans, or current practices. We determined that HUD responded to the incident properly, following United States Computer...

In response to a request from the Recovery Accountability and Transparency Board, we gathered and documented information from the U.S. Department of Housing and Urban Development (HUD) regarding its lessons learned from the implementation of the American Recovery and Reinvestment Act of 2009. This initiative was led by the U.S. Department of Interior, Office of Inspector General (OIG). The objective of the initiative was to identify...

In conjunction with our external audit of Innotion Enterprises, Inc. (Audit Report #2012-LA-1010), we reviewed termite inspection passthrough costs that it submitted to the U.S. Department of Housing and Urban Development (HUD) for payment as part of its real estate-owned (REO) Management and Marketing III (M&M III) program field service manager contract. We selected Innotion’s Las Vegas, NV, branch based on the size and scope of...

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG) completed its nationwide effort to review the foreclosure practices of the five largest Federal Housing Administration (FHA) mortgage servicers (Ally Financial, Incorporated, Bank of America, CitiMortgage, JPMorgan Chase, and Wells Fargo Bank). We performed these reviews due to reported allegations made in the fall of 2010 that national...

We completed a review of the Village of Spring Valley, NY, a subrecipient of Rockland County, NY. We selected this auditee based on a hotline complaint that was referred from the Federal Housing Finance Agency (FHFA) OIG, Complaint Number Z-12-0445-1, received on February 14, 2012. The complaint alleged that the Village (1) used eminent domain and Federal funds to seize property, (2) transferred ownership of properties to a developer...

We reviewed the U.S. Department of Housing and Urban Development’s (HUD) technical assistance for the HOME Investment Partnerships Program. The review was part of the activities in our fiscal year 2012 annual audit plan. We initiated the review based upon a congressional request. Our objective was to determine whether HUD’s Office of Community Planning and Development sufficiently tracked Program technical assistance activities,...

We conducted a limited review of Federal Housing Administration (FHA) loans underwritten by Shea Mortgage, Inc. We selected the lender based on the results of an auditability survey, which determined that Shea Mortgage allowed prohibited restrictive covenants to be filed against FHA-insured properties. The objective of our review was to determine the extent to which Shea Mortgage failed to prevent the recording of prohibited...

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Attorney’s Office, Southern District of New York, in conducting a review of CitiMortgage, Inc. CitiMortgage is a direct subsidiary of Citibank, N.A., and Citibank is an indirect subsidiary of Citigroup. CitiMortgage is based in O’Fallon, MO. The review began due to a qui tam filing in the U.S. District Court for the...

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), conducted a review of Section 8 housing assistance payments made to Lynn Leggins, a landlord, for a tenant with whom he lived. The objective of our review was to determine whether Mr. Leggins received housing assistance payments that he was not eligible to receive. HUD’s Section 8 Housing Choice Voucher program provides rental subsidies...

The U.S. Department of Housing and Urban Development, Office of Inspector General (OIG) conducted a civil fraud review of an alleged foreclosure rescue scheme operated by Terrill L. Meisinger of Seal Beach, CA. The alleged scheme involved more than 100 properties in three States that were financed through Federal Housing Administration (FHA) and conventional loans and allegedly defrauded distressed homeowners, renters, and lenders....

We completed a corrective action verification of the recommendations made to the U.S. Department of Housing and Urban Development’s (HUD) Office of Community Planning and Development (CPD) pertaining to our review of The City of Newburgh, NY’s Section 108 Loan Guarantee program, Audit Report 2009-NY-1001, which was issued November 7, 2008. The purpose of the corrective action verification was to determine whether the audit...

Based on a request by the U.S. Department of Housing and Urban Development’s (HUD) multifamily housing Kansas City hub office, we started an audit of three related nursing facilities on August 2008: • Bartlesville Health Care Center, Inc., doing business as Silver Lake Care Center; • Mannford Health Care Center, Inc., doing business as Cimarron Pointe Care Center; and • Owasso Nursing Center, Inc., doing...

In response to a request from Senator Jeanne Shaheen, we compiled information from audits and investigative activities we performed that included findings or allegations regarding the U.S. Department of Housing and Urban Development’s (HUD) conference spending and related travel.  Our records showed that we performed 34 such reviews between October 1995 and January 2012.  Our audit reports disclosed immaterial instances of...