We reviewed Doral Bank Puerto Rico (Doral), an approved issuer for the Government National Mortgage Association (Ginnie Mae). Our objective was to determine whether Doral complied with Ginnie Mae requirements associated with its mortgage-backed securities activities. The review was initiated in connection with the 2007 Ginnie Mae financial statement audit.

Doral did not fully comply with Ginnie Mae requirements because it maintained seven noninsured loans in Ginnie Mae pools. It also failed to ensure that data on its pooled loans were accurate. As a result, Doral retained defective loans with unpaid principal totaling $448,167 in its Ginnie Mae pools and reported inaccurate information to Ginnie Mae and HUD.

We recommend Ginnie Mae require Doral to take corrective measures to ensure that the defective loans identified during the review are reinsured or removed from the Ginnie Mae pools and that the loans reflect complete and accurate mortgage information. We also recommend that Ginnie Mae ensure that Doral establishes and implements adequate controls and procedures to periodically verify that all of its Ginnie Mae pooled loans are insured in accordance with Ginnie Mae requirements.