We audited the U.S. Department of Housing and Urban Development’s (HUD) oversight of its Home Equity Conversion Mortgage Program based on our annual audit plan and our strategic goal to improve the integrity of HUD’s single-family insurance programs. This is the second of two reports that we issued on HUD’s oversight of the Program. Our objective was to determine whether HUD controls prevented borrowers from renting their properties to Section...

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 mortgage...

The U.S. Department of Housing and Urban Development’s (HUD), Office of Inspector General reviewed the Federal Housing Administration (FHA) Preforeclosure Sale Program. Our objective was to determine whether FHA paid claims for only preforeclosure sales that met the criteria for participation in the program. We found that 61 of 80 statistically selected claims from September 1, 2010, through August 31, 2011 did not meet the criteria for...

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG) audited HUD’s oversight of its real estate-owned (REO) Management and Marketing (M&M) III program in response to a HUD OIG auditability survey on REO contract administration. Our audit objective was to determine whether HUD’s policies and procedures provided for efficient and effective oversight of asset managers and field service managers under...

The U.S. Department of Housing and Urban Development, Office of Inspector General audited the U.S. Department of Housing and Urban Development’s (HUD) oversight of Federal Housing Administration (FHA)-insured loans. We initiated the audit as part of the activities in our 2011 annual audit plan and strategic plan. Our audit objective was to determine whether HUD had adequate oversight of lenders’ compliance with FHA’s underwriting requirements...

We performed an audit of the National Foundation for Credit Counseling based on a citizen’s complaint alleging that it misused Federal funds. Our objective was to determine whether the Foundation complied with U.S. Department of Housing and Urban Development (HUD) requirements when administering its housing counseling program. The complaint alleging that the Foundation misused Federal funds could not be substantiated. The Foundation generally...

We completed a corrective action verification regarding the recommendations made to the U.S. Department of Housing and Urban Development’s (HUD) Office of Single Family Program Development pertaining to our review of HUD’s monitoring of the Housing Counseling Assistance Program, Audit Report 2006-NY-0001, issued June 8, 2006. The purpose of the corrective action verification was to determine whether the audit recommendations had been...

We audited the U.S. Department of Housing and Urban Development’s (HUD) oversight of its Home Equity Conversion Mortgage (HECM) program based on our annual audit plan and our strategic goal to improve the integrity of HUD’s single-family programs. This is the first of two reports that we plan to issue on HUD’s oversight of the program. Our objective was to determine whether HUD’s controls effectively ensured that HECM loan borrowers complied...

In accordance with our audit plan we audited the U.S. Department of Housing and Urban Development’s (HUD) Philadelphia, PA, Homeownership Center’s quality assurance procedures for monitoring originations of Federal Housing Administration (FHA) single-family mortgage loans. Our audit objective was to determine whether the Homeownership Center properly monitored single-family loan originations in its jurisdiction by implementing quality assurance...

We audited the U.S. Department of Housing and Urban Development’s (HUD) field review appraisal process. This audit was conducted as part of the HUD Office of Inspector General’s (OIG) fiscal year 2011 annual audit plan and was designed to follow up on selected findings in OIG’s Audit Report 2008-LA-0003 on the appraiser review process. Our objective was to determine whether HUD (1) ensured that field review appraisers complied with the appraisal...

In accordance with the Government Corporation Control Act as amended (31 U.S.C. 9105), the Office of Inspector General engaged the independent certified public accounting firm of Clifton Gunderson LLP (CG) to audit the fiscal years 2011 and 2010 financial statements of the Federal Housing Administration (FHA). The contract required that the audit be performed according to Generally Accepted Government Auditing Standards (GAGAS). CG is...

The U.S. Department of Housing and Urban Development – Office of Inspector General audited the Federal Housing Administration because we noted during previous audit work that FHA might not have a system in place to track lenders who voluntarily left the FHA program with outstanding indemnification agreements. Our objective was to determine whether FHA prevented corporate officers from participating in FHA programs after those officers left...

HUD OIG conducted an evaluation of Home Equity Conversion Mortgage (HECM) Loan Payments Made After Death of Borrower. A HUD OIG query of the HUD Single Family Data Warehouse (SFDW) disclosed that servicers of home equity conversion mortgages  were making payments to borrowers after the borrowers’ date of death.  Therefore, the Inspections and Evaluations Division conducted a review to validate the HECM data and to determine whether...

The U. S. Department of Housing and Urban - Office of Inspector General audited the Federal Housing Administration’s (FHA) Title II single-family lender renewal process. Our objective was to determine whether FHA’s Lender Approval and Recertification Division’s (Division) controls were adequate for determining whether lenders met FHA annual renewal requirements. The Division had taken significant steps to strengthen its controls over the...

We audited the U.S. Department of Housing and Urban Development’s (HUD) preclosing and postclosing loan review of new Federal Housing Administration (FHA) direct endorsement lenders to determine whether HUD followed its guidance when (1) reviewing the initial loans underwritten by new FHA direct endorsement lenders and (2) performing the postendorsement technical review of all of the initial loans endorsed by newly approved direct endorsement...

We audited the U. S. Department of Housing and Urban Development’s (HUD’s) National Servicing Center’s (NSC) Federal Housing Administration (FHA)-Home Affordable Modification Program (HAMP) as a part of our annual audit plan. Our objective was to determine whether the NSC implemented and operated FHA-HAMP in accordance with rules and regulations. Overall, the NSC implemented and operated FHA-HAMP in accordance with the necessary rules and...

In January 2010, the U.S. Department of Housing and Urban Development's (HUD) Office of Inspector General (OIG) began Operation Watchdog, an initiative to review the underwriting of 15 Federal Housing Administration (FHA) direct endorsement lenders having default and claim rates indicating lender performance problems. The FHA Commissioner had expressed concern regarding the increasing default and claim rates against the FHA insurance fund...

The U.S. Department of Housing and Urban Development's (HUD) Office of Inspector General audited HUD’s Office of Lender Activities and Program Compliance, Quality Assurance Division. We did this review because during a prior audit, we saw instances in which indemnification agreements were not obtained from lenders under certain circumstances. Our objective was to determine whether the U.S. Department of Housing and Urban Development (HUD...

We completed an audit of U.S. Department of Housing and Urban Development (HUD) Single Family Program Development Office’s automated underwriting process. We assessed whether HUD had in place appropriate and effective management controls over its automated underwriting process. The audit was performed as part of the HUD Office of Inspector General’s (OIG) fiscal year 2010 annual audit plan and supported the audit plan objective to contribute...

We performed an internal audit of the U. S. Department of Housing and Urban Development’s (HUD) Home Equity Conversion Mortgage (HECM) program because we found that an increasing number of borrowers had not paid taxes or homeowners insurance premiums as required, thus placing the loan in default. Also, we noted that HUD had granted foreclosure deferrals routinely on defaulted loans, but it had no formal procedures. Our audit objective was to...