We performed an audit of loan servicers’ compliance with the Federal Housing Administration’s (FHA) requirements for providing loss mitigation assistance to borrowers after their COVID-19 forbearance ended.  We initiated the audit based on the large number of borrowers exiting forbearance, Read More

We audited Nationstar Mortgage, LLC’s (doing business as Mr. Cooper (Nationstar)) compliance with the Federal Housing Administration’s (FHA) requirements for providing loss mitigation assistance to borrowers after their COVID-19 forbearance ended. We concurrently conducted a nationwide audit of Read More

We audited the Virgin Islands Housing Finance Authority’s monitoring of its Community Development Block Grant Disaster Recovery (CDBG-DR)-funded activities.  We initiated the audit because of the large amount of CDBG-DR funds awarded to the U.S. Virgin Islands for the 2017 disasters and to aid Read More

We audited the Virgin Islands Housing Finance Authority’s Non-Federal Match Program for Community Development Block Grant Disaster Recovery (CDBG-DR) funds.  This Match Program was developed to assist non-Federal entities in paying for their share of projects that addressed unmet needs because Read More

Develop and implement a nationwide inspection review protocol, which includes but is not limited to (1) whether field office staff should mark verification of PHA corrections of life-threatening deficiencies in PASS or any future tracking systems, (2) acceptable documentation for offsite Read More

Develop and implement training for field offices that addresses reviewing or following up with PHAs about the correction of life-threatening and non-life-threatening deficiencies and how (1) to review physical inspection reports to effectively ensure that PHAs correct physical deficiencies, (2) Read More

Implement a system to track field office inspection review activities and create a repository for the support documentation collected to verify the correction of life-threatening deficiencies. Corrective Action Taken HUD’s Office of Field Operations (OFO) had created a quality assurance Read More

We recommend that the Deputy Assistant Secretary for REAC determine whether PHAs are required to perform annual inspections on 100 percent of their public housing units annually and issue clarifying guidance to all PHAs.

If REAC determines that 100 percent annual self-inspections are required, establish specific guidance to address the number of units and frequency of PHA self-inspections. If not required, REAC should evaluate whether HUD’s rationale for inspecting a statistical sample rather than 100 percent of Read More

Develop and implement a nationwide protocol for field offices, describing how PHA self-inspections should be reviewed, based on REAC's determination of the number and frequency of PHA self-inspections. Status The Office of Field Operations will develop and implement a nationwide protocol Read More

Require lenders to execute indemnification agreements covering a period of at least 5 years for each of the 20 loans for which the lenders did not comply with the temporary endorsement policy and related instructions, including loans for which the lenders did not execute an agreement when required Read More

Obtain guidance from the Office of General Counsel regarding the implications of allowing lenders to retroactively apply forbearance in cases in which the borrower requests forbearance after the lender submits the loan for endorsement to ensure that it consistently handles such cases.

Request and analyze data from lenders for the 3,024 loans at risk of noncompliance to identify loans that should have been subject to the temporary endorsement policy or were otherwise ineligible for insurance. The data requested should include but not be limited to the dates when the borrower Read More

For any of the 3,024 loans found to be subject to the temporary policy or otherwise ineligible for insurance, require the lenders to execute indemnification agreements covering a period of at least 5 years or reimburse HUD for any claims to put up to $26,840,071 to better use by protecting HUD Read More

Update data in HUD’s system for the three cases in which the lender incorrectly reported the loans as in COVID-19 forbearance at the time of endorsement to ensure that accurate data are maintained.

Consider implementing a policy to review any of the 292 loans not reviewed as part of this audit that result in a request for claim to ensure that the loans qualified for endorsement under the temporary endorsement policy so that HUD can avoid unnecessary payments for loans that should not have Read More

Record indemnification agreement data in its system for the 34 loans for which the lender properly executed an indemnification agreement before endorsement and HUD had not recorded the agreement in its system to put up to $3,493,636 to better use by avoiding potential losses.

Review and correct indemnification agreement data in HUD’s computer systems as needed for all agreements currently classified as having 2-year terms and all agreements related to 2-year agreements contained on its SharePoint site to ensure that its systems contain accurate data for monitoring and Read More

Update indemnification agreements or obtain updated indemnification agreements for the 30 loans for which the indemnification agreements had incorrect or missing information or were not signed by HUD and upload them to its SharePoint site so that such agreements are properly executed and can be Read More