The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), referred alleged violations to HUD’s Office of Program Enforcement for action under the Program Fraud Civil Remedies Act based on two audits of DHI Mortgage Company Ltd.  (DHIM) that found it did not follow HUD requirements when it underwrote Federal Housing Administration (FHA)-insured loans with prohibited restrictive addenda to the purchase...

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited Solace LLC’s Section 8 housing assistance payments program because of the results of our previous audit of another multifamily property.  The person responsible for housing assistance program issues at the other property was also Solace’s manager.  Our objectives were to determine whether Solace correctly computed tenant annual income,...

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited Reflection5 LLC’s Section 8 housing assistance payments program because of the results of a previous audit of another multifamily property.  The person responsible for housing assistance program issues at the other property was also involved with the housing assistance program at Reflection5.  Our objectives were to determine whether...

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited the Sunset Manor Apartments to evaluate the allegations in a complaint and determine whether the project’s owner made unauthorized distributions and repayment of advances, maintained complete, accurate, and current books and records for the project, and participated in improper procurement practices.         ...

We audited Coconut Grove Apartments due to concerns expressed by the U.S. Department of Housing and Urban Development’s (HUD) Office of Multifamily Housing Programs regarding the management of the project.  The main concern was that the owner may have diverted project funds for nonproject expenses.  Our audit objective was to determine whether Coconut Grove’s owner operated its Sections 223(f) and 241(a)-insured multifamily rental...

We audited NOVA Financial & Investment Corporation based on a referral from the U.S. Department of Housing and Urban Development’s (HUD) Quality Assurance Division detailing a separate lender that originated Federal Housing Administration (FHA)-insured loans that contained ineligible downpayment assistance gifts.  The HUD Office of Inspector General’s (OIG) analysis identified NOVA as a lender with the highest origination volume in the...

HUD OIG conducted a civil investigation of an alleged loan origination fraud scheme involving a cash-out refinance loan that was insured by the Federal Housing Administration (FHA).  FHA provides mortgage insurance on loans made by FHA-approved lenders to creditworthy borrowers.  Borrowers must occupy the properties as their primary residence for at least 1 year.  Borrowers certify to their intent to occupy the property when...

We reviewed Southwest Stage Funding, LLC, dba Cascade Financial Services, in Gilbert, AZ.  We selected Southwest Stage because it originated 1,841 loans totaling more than $244 million during calendar years 2012 and 2013.  Further, it had received more loan endorsements on manufactured housing loans than any other lender in Texas since January 1, 2009.  Our objective was to determine whether the lender complied with U.S....

We audited the White Mountain Apache Housing Authority’s Indian Housing Block Grant (IHBG).  We conducted the audit primarily due to concerns raised by HUD’s Southwest Office of Native American Programs regarding the Authority’s financial management practices.  The objective of the audit was to determine whether the Authority used its IHBG funds in accordance with HUD requirements. The Authority failed to use its IHBG funds in...

We audited The Lending Company, Inc., based on a hotline complaint, previous U.S. Department of Housing and Urban Development (HUD) reviews, and our goal to improve the integrity of the Federal Housing Administration (FHA) single-family insurance programs.  Our objectives were to determine whether The Lending Company complied with HUD requirements when it used gift programs, originated and underwrote FHA loans, and implemented its quality...

We audited the State of Iowa’s monitoring of the City of Cedar Rapids’ voluntary property acquisition program.   We selected the State for review based on a prior audit of the City’s voluntary property acquisition program.  During fiscal years 2009 through 2012, the State awarded the City more than $166 million in disaster funding.  Our audit objective was to determine whether the State monitored the City’s voluntary...

The U.S. Department of Housing and Urban Development (HUD) – Office of Inspector General audited the Idaho Housing and Finance Association’s HOME Investment Partnerships Program because it received approximately $6 million in HOME grants from the U.S. Department of Housing and Urban Development (HUD) in each of fiscal years 2008 through 2010. The objective of our review was to determine whether Idaho Housing complied with HOME match fund and...

The U.S. Department of Housing and Urban Development, Office of Inspector General audited Allen Mortgage, Limited Liability Company, a Federal Housing Administration (FHA) nonsupervised lender. We selected Allen Mortgage for audit based on its high default and claim rate for the FHA-insured loans sponsored in Region 5. Our objectives were to determine whether (1) Allen Mortgage complied with HUD’s regulations, procedures, and instructions in...

We completed a review of the City of Phoenix’s (City) Neighborhood Stabilization Program (NSP) grants NSP1 and NSP2. We performed the review because it supports the U.S. Department of Housing and Urban Development (HUD), Office of Inspector General’s strategic plan to contribute to the oversight objectives of the American Recovery and Reinvestment Act of 2009 and the City received a $60 million grant as one of 56 NSP2 grantees. Our objective...

We audited the Federal Housing Administration (FHA)-insured loan process at MetLife Bank’s (lender) branch in Scottsdale, AZ, to determine whether the lender underwrote FHA-insured loans and implemented a quality control plan in accordance with U.S. Department of Housing and Urban Development (HUD) requirements. We selected the lender because it had an FHA default rate of 7.41 percent for loans underwritten in Arizona between April 1, 2009, and...

We audited Housing Our Communities’ (subrecipient) Neighborhood Stabilization Program (NSP1) subgrant from the City of Avondale. The audit was started primarily because the U.S. Department of Housing and Urban Development, Office of Inspector General’s (HUD OIG) audit plan includes objectives to review Housing and Economic Recovery Act grantees and because a previous HUD OIG audit of the City of Mesa found indications that the subrecipient did...

The U.S. Department of Housing and Urban Development (HUD) – Office of Inspector General audited the Idaho Housing and Finance Association’s HOME Investment Partnerships Program because HUD had not performed a comprehensive monitoring review of Idaho Housing’s program since 2007 and it received approximately $6 million in HOME grants from HUD in each of the fiscal years 2008 through 2010. The objective of our review was to determine whether...

We audited Chicanos Por La Causa, Inc.’s (grantee) Neighborhood Stabilization Program 2 (NSP2) grant to determine whether the grantee administered its NSP2 grant in accordance with HUD’s program requirements. We conducted the audit as part of the U.S. Department of Housing and Urban Development (HUD), Office of Inspector General’s (OIG) fiscal year 2011 annual audit plan and to support HUD OIG’s fiscal year 2011 strategic goal to contribute to...

We reviewed Federal Housing Administration (FHA)-insured loan settlement documents from two branches of DHI Mortgage Company, LTD (DHI Mortgage), in Arizona. During a previous audit of loan origination by the same branches (audit report number 2009-LA-1018), there was information indicating that the Real Estate Settlement Procedures Act (Act) might have been violated; however, we were unable to report on the issue at the time. Our review...

We audited the City of Mesa’s (grantee) Neighborhood Stabilization Program (NSP1) grant to determine whether the grantee administered the grant in accordance with HUD’s program requirements. The audit was started primarily because the Office of Inspector General’s (OIG) audit plan includes objectives to review Housing and Economic Recovery Act grantees and because staff from the U.S. Department of Housing and Urban Development’s (HUD) Office of...