In accordance with the Chief Financial Officers Act of 1990, as amended, we are required to annually audit the consolidated financial statements of the U.S. Department of Housing and Urban Development (HUD) and the stand-alone financial statements of the Federal Housing Administration and the Government National Mortgage Administration (Ginnie Mae). Our objective was to express an opinion on the fairness of HUD’s consolidated financial...

This report was reissued on December 6, 2017 to correct an error in recommendation 2G found in Finding 2.  Recommendation 2G now reflects the correct prior year recommendation that must be reopened. We are required to audit the consolidated financial statements of the U.S. Department of Housing and Urban Development (HUD) annually in accordance with the Chief Financial Officers Act of 1990 as amended. This report supplements our...

We audited the Federal Housing Administration-insured nursing home, Riverside Health and Rehabilitation Center (the project), of East Hartford, CT, based on our risk assessment of nursing homes in the New England region.  Additionally, the U.S. Department of Housing and Urban Development (HUD) identified the project as potentially troubled as of January 9, 2017, and four physical inspections performed by HUD’s Real Estate Assessment Center...

In accordance with the statutory requirements of the Digital Accountability and Transparency Act of 2014 (DATA Act) and standards established by the Office of Management and Budget (OMB), we audited the U.S. Department of Housing and Urban Development’s (HUD) Office of the Chief Financial Officer’s (OCFO) compliance with the DATA Act for the second quarter of fiscal year 2017. In the DATA Act Compliance Audit of the U.S. Department of Housing...

We audited Mary Scott Nursing Center (project) based on our analysis of risk factors related to the U.S. Department of Housing and Urban Development’s (HUD) multifamily nursing projects in Region 5’s jurisdiction (States of Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin).  The audit was part of the activities in our fiscal year 2017 annual audit plan.  Our objective was to determine whether the project’s owner and...

We audited BLM Companies LLC, a contracted field service manager in HUD’s real estate-owned Management and Marketing III program, as part of the activities included in our 2017 annual audit plan and because it was the sole contractor performing property preservation and protection services for U.S. Department of Housing and Urban Development (HUD)-acquired properties located in Ohio.  Our audit objective was to determine whether BLM...

We audited the U.S. Department of Housing and Urban Development’s (HUD) oversight of safe water requirements for Federal Housing Administration (FHA)-insured loans nationwide.  We conducted the audit based on news reports that identified lead contamination in public water systems across the country and also because of an audit in which we found that HUD did not have adequate controls to ensure that FHA-insured properties located in Flint,...

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited HUD’s rulemaking process for its single family note sales program.  This is the second in a series of audits on the note sales program.  The previous audit, 2017-KC-0006, reported that HUD did not conduct rulemaking or develop formal procedures for its single-family note sales program.  This audit examines a different aspect of the...

We audited RMS & Associates’ Federal Housing Administration (FHA) loan origination because it was one of the top lenders that originated FHA-insured loans with downpayment assistance from the City of Las Vegas.  A previous U.S. Department of Housing and Urban Development, Office of Inspector General (HUD OIG), audit (Evergreen Home Loans, 2016-LA-1011) found that Evergreen originated FHA-insured loans in connection with the City of Las...

We audited the functionality of the U.S. Department of Housing and Urban Development’s (HUD) New Core Financial Management Solution as part of the internal control assessments required for the fiscal year 2017 financial statement audit under the Chief Financial Officer’s Act of 1990.  Our objective was to determine whether effective business processes and interface processing controls were in place for the New Core Financial Management...

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Department of Justice (DOJ) and the U.S. Attorney’s Offices, District of New Jersey, District of Minnesota, and Southern District of Florida, in the civil investigation of PHH Corporation, PHH Mortgage Corporation (PHHMC), and PHH Home Loans, LLC (PHHHL), collectively referred to as PHH.  PHH was a direct endorsement lender...

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Department of Justice (DOJ) and the U.S. Attorney’s Office for the Southern District of New York in a civil investigation of Residential Home Funding Corp.  Residential Home is a Federal Housing Administration (FHA)-approved mortgage lender having its principal place of business in White Plains, NY. On September 18, 2017,...

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited the HUD’s travel and purchase card programs for fiscal year 2016 based on (1) our annual risk assessment of these programs and (2) our requirement under the Charge Card Abuse Prevention Act of 2012 to periodically review government travel and purchase cards.  The most recent risk assessment found that there was a moderate risk of illegal,...

We audited Schwenckfeld Manor because it was a high-risk multifamily project on our multifamily risk assessment for projects within our region and we had never audited it.  Our audit objectives were to determine whether the project owner (1) disbursed project funds for costs that were reasonable, necessary, and supported for the operation and maintenance of the project; and (2) properly disclosed identity-of-interest relationships. The...

We audited SecurityNational Mortgage Company’s Federal Housing Administration (FHA) loan origination because it was among the top lenders that originated FHA-insured loans with downpayment assistance from the City of Las Vegas.  A previous U.S. Department of Housing and Urban Development, Office of Inspector General (HUD OIG), audit (Evergreen Home Loans, 2016-LA-1011) found that Evergreen originated FHA-insured loans in connection with...

We audited Baker Tower Apartments, LLC (corporation), located in Denver, CO, based on data showing that the corporation had taken more than $3.4 million in owner distributions since 2013 and scored poorly on its most current Real Estate Assessment Center physical property inspection.  The objective of our audit was to determine whether the corporation complied with the regulatory agreement and U.S. Department of Housing and Urban...

We audited the U.S. Department of Housing and Urban Development’s (HUD) process for forgiving debts and terminating debt collections based on an Office of Inspector General (OIG) preaudit analysis that noted potential violations of debt collection requirements related to disallowed costs in a prior OIG audit recommendation.  Our audit objective was to determine whether HUD complied with applicable requirements when forgiving debts and...

We audited Venta Financial Group’s Federal Housing Administration (FHA) loan origination because it was one of the top lenders that originated FHA-insured loans with downpayment assistance from the City of Las Vegas.  A previous U.S. Department of Housing and Urban Development, Office of Inspector General (HUD OIG) audit (Evergreen Home Loans, 2016-LA-1011) found that Evergreen originated FHA-insured loans in connection with the City of...

We audited MB Financial Bank, a Federal Housing Administration (FHA)-approved direct endorsement lender, as part of our efforts to protect the integrity of the U.S. Department of Housing and Urban Development’s (HUD) single-family housing mortgage insurance programs.  We selected MB Financial for review based on an analysis of underwriting and default data maintained by HUD.  Our objective was to determine whether MB Financial...

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Attorney’s Office for the District of Massachusetts in the civil investigation of First American Mortgage Trust.  First American has its principal place of business in Brighton, MA, and does business as NXTLoan.Com Corp., a Delaware corporation.  First American is the parent company of NXTL. On October 18, 2016, First...