The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Attorney’s Office, Southern District of New York, in conducting a review of MortgageIT, Inc. MortgageIT is a residential mortgage banking company headquartered in New York City, NY. Originally founded in 1988, MortgageIT was acquired by Deutsche Bank in 2007, and was a HUD-approved Title II nonsupervised mortgage company. Its home...

We audited the Los Angeles Neighborhood Housing Services’ Neighborhood Stabilization Program 2 (NSP2). We performed the audit because American Recovery and Reinvestment Act of 2009 reviews are part of the Office of Inspector General’s (OIG) annual plan and Neighborhood Housing Services was awarded $60 million in Recovery Act NSP2 funds in a consortium agreement with 12 other organizations on February 11, 2010. Our audit objective was to...

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), conducted a review to determine whether Indymac Bank followed Federal Housing Administration (FHA) policies and procedures when it originated FHA-insured loans. We identified a set of questionable loans originated by Indymac that had been generated by Beechwood Incorporated, a company that conducted various real estate services. Based on our review...

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), conducted a review to determine whether Indymac Bank followed Federal Housing Administration (FHA) policies and procedures when it originated FHA-insured loans. We identified a set of questionable loans originated by Indymac that had been generated by Beechwood Incorporated, a company that conducted various real estate services. Based on our review...

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), conducted a review to determine whether Indymac Bank followed Federal Housing Administration (FHA) policies and procedures when it originated FHA-insured loans. We identified a set of questionable loans originated by Indymac that had been generated by Beechwood Incorporated, a company that conducted various real estate services. Based on our review...

We reviewed the books and records of Amar Plaza (project), a U.S. Department of Housing Department (HUD)-insured (Section 236) multifamily cooperative housing project with project-based Section 8 assistance located in La Puente, CA. We initiated the review in response to a request from the Departmental Enforcement Center due to its concerns about Amar Plaza’s serious compliance issues, including but not limited to overdue 2009 and 2010...

We completed a review of the New York City Housing Authority’s use of Federal funds. We selected this auditee based on a hotline complaint, case number HL-2011-0705, which alleged a pattern of waste, overspending, and abuse by the Authority. Specifically, the complaint alleged that the Authority (1) froze its Section 8 vouchers due to lack of available funds, (2) overpaid at least one housing manager with an annual salary of $187,000, (3) paid...

We reviewed alleged violations of U.S. Department of Housing and Urban Development (HUD) Federal Housing Administration (FHA) loan origination requirements by the subject. We concluded that the subject placed fraudulent information and documents in mortgage loan applications for Government-insured home loans. The Department of Justice filed a complaint under the Financial Institutions Reform, Recovery, and Enforcement Act; and in March 2012...

We reviewed alleged violations of U.S. Department of Housing and Urban Development (HUD) Federal Housing Administration (FHA) loan origination requirements by the subject. We concluded that the subject created and altered documents used in mortgage loan applications for Government-insured home loans. The Department of Justice filed a complaint under the Financial Institutions Reform, Recovery, and Enforcement Act; and in December 2011 reached...

We reviewed alleged violations of U.S. Department of Housing and Urban Development (HUD) Federal Housing Administration (FHA) loan origination requirements by the subject. We concluded that the subject placed fraudulent information and documents in mortgage loan applications for Government-insured home loans. The Department of Justice filed a complaint under the Financial Institutions Reform, Recovery, and Enforcement Act; and in December 2011...

The City did not expend Brownfields and Section 108 funds awarded for the development of the project in accordance with HUD requirements. Specifically, the City used loan and grant funds for an ineligible project and expended grant funds after the grant deadline. As a result, it expended (1) $3.8 million in loan funds on an ineligible project, (2) $625,000 in grant funds on an ineligible project after the grant expenditure deadline, and (3) an...

We audited the City of Syracuse, NY, pertaining to its Economic Development Initiative (EDI)-Special Project grants. The audit objective was to determine whether City officials were administering EDI Special Project grants effectively, efficiently, and economically in accordance with applicable rules and regulations. Specifically, we wanted to determine whether City officials expended EDI funds for eligible activities that were fully supported...

We audited the City of Modesto’s Neighborhood Stabilization Program 2 (NSP2). We performed the review because it was part of the Office of Inspector General’s (OIG) audit plan to conduct audits of NSP2 under the American Reinvestment and Recovery Act of 2009. We selected the City because it received $25 million and HUD’s San Francisco Office of Community Planning and Development requested that OIG consider a review of the City. Program funds...

We completed an audit of the City of Buffalo, NY (City) pertaining to its administration of its supplemental Community Development Block Grant (CDBG) program funded under the American Recovery and Reinvestment Act of 2009. We selected the City based on concerns identified in our completed audit of the City’s CDBG program, Audit Report Number 2011-NY-1010 issued April 15, 2011. Our audit objectives were to determine whether the City...

We audited the operations of the City of Syracuse, NY, pertaining to its Community Development Block Grant (CDBG) program. The objectives of the audit were to determine whether the City administered its CDBG program effectively, efficiently, and economically in accordance with applicable rules and regulations. Specifically, we wanted to determine whether City officials had (1) established and implemented the necessary controls to ensure that...

We completed an audit of the City of New York, NY (City), pertaining to its administration of its Homelessness Prevention and Rapid Re-Housing Program (HPRP) funded under the American Recovery and Reinvestment Act of 2009. Our audit objectives were to determine whether City officials (1) disbursed HPRP funds efficiently and effectively in accordance with HUD and other applicable requirements; (2) had a financial management system in place to...

The U.S. Department of Housing and Urban Development, Office of Inspector General audited Countrywide Bank, FSB (Countrywide),* a Federal Housing Administration (FHA) supervised lender** approved to originate, underwrite, and submit mortgages for insurance under the U.S. Department of Housing and Urban Development’s (HUD) direct endorsement program. We selected Countrywide based on its average default-to-claim rate of 6.76 percent for the FHA-...

We conducted a review to determine whether IndyMac Bank followed Federal Housing Administration (FHA) policies and procedures when it originated FHA-insured loans. We focused on loans secured by California properties and that were in claim or default status as of February 12, 2009. Within this group, we identified a set of questionable loans originated by IndyMac that had been generated by Beechwood Incorporated. Beechwood is a company...