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Document

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), reviewed preforeclosure sales under the Federal Housing Administration (FHA) program in the St. Louis, MO, area.  We found that the purchaser of a property being sold in a preforeclosure sale entered into a consulting agreement with the realtor.  The agreement required that when the purchaser later sold the property, he would pay half of the net proceeds from that sale to the realtor’s consulting company.    

On December 17, 2015, HUD served a complaint on the purchaser seeking a penalty and an assessment under the Program Fraud Civil Remedies Act.  The complaint alleged that he caused the submission of a false claim to HUD and made multiple false statements in the arm’s-length affidavit.

HUD and the purchaser entered into a settlement as both parties mutually desired to avoid further expense and litigation and to reach a satisfactory resolution of this matter.  The settlement agreement did not constitute an admission of liability or fault on the part of any party and was voluntary and entered into by the purchaser after due consideration of the terms of the agreement.  The purchaser agreed to pay HUD $5,000.

Recommendations

Key Details
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  Open
  Closed
Funds Put to Better Use
Funds Put to Better Use

Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.

Questioned Costs
Questioned Costs

Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.

Sensitive
Sensitive

Sensitive information refers to information that could have a damaging import if released to the public and, therefore, must be restricted from public disclosure.

Priority
Priority

We believe these open recommendations, if implemented, will have the greatest impact on helping HUD achieve its mission to create strong, sustainable, inclusive communities and quality affordable homes for all.

General Counsel

  •   2017-KC-1801-001-A
    $5,000.00

    Acknowledge that the settlement agreement for $5,000 represents an amount due HUD.