The Chief Financial Officers Act of 1990 (Public Law 101-576), as amended, requires the Officeof Inspector General to audit the financial statements of the Federal Housing Administration(FHA) annually. We audited the accompanying financial statements and notes of FHA as of andfor the fiscal years ending September 30, 2018 and 2017 (restated), which are comprised of thebalance sheets, related statements of net cost and changes in net…

We audited the Dolores Frances Affordable Housing project, based on a citizen complaint and a suggestion from the U.S. Department of Housing and Urban Development’s (HUD) Departmental Enforcement Center.  The complaint alleged nonpayment of HUD utility allowances and security deposits, mismanagement of the maintenance department, related parties hired in supervisory positions, and conflict-of-interest vendor contracts by the…

We audited SWBC Mortgage Corporation, a Federal Housing Administration (FHA) direct endorsement lender in San Antonio, TX. We selected the lender for audit because as of September 30, 2011, it had 25 seriously delinquent loans. Our objective was to determine whether the lender originated single-family home loans in accordance with U. S. Department of Housing and Urban Development (HUD) and FHA requirements for loans with…

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 J&M Mortgage Brokers, Ltd., dba Mortgages USA, a Dallas, TX-based nonsupervised direct endorsement lender. We selected J&M because it had a high rate of defaults and claims within the first year. Our audit objectives were to determine whether J&M originated Federal Housing Administration (FHA)-insured single family mortgages in accordance with U. S. Department of Housing and Urban Development (HUD) regulations…

We audited Four Freedoms House of Philadelphia, Inc.’s management of its Section 202 housing project. We selected Four Freedoms for an audit because we received a complaint alleging that it mismanaged its Section 202 housing project. Our audit objective was to determine whether Four Freedoms managed its Section 202 housing project according to the requirements of its regulatory agreement and applicable HUD requirements. We focused…

As part of the Office of Inspector General’s (OIG) nationwide effort to review the foreclosure practices of the five largest Federal Housing Administration (FHA) mortgage servicers (Bank of America, Wells Fargo Bank, CitiMortgage, JP Morgan Chase, and Ally Financial, Incorporated) we reviewed Ally Financial, Incorporated’s foreclosure and claims processes. In addition to this memorandum, OIG issued separate memorandums for each of…

We performed an audit of PrimeLending, A PlainsCaptial Company, located in Dallas, TX, a Federal Housing Administration (FHA) direct endorsement lender. We selected PrimeLending for audit because of its high default rate in the Houston, Dallas, and Fort Worth, TX, offices as compared to the average default rate for all FHA loans in those offices. Our objective was to determine whether PrimeLending complied with U. S. Department of…

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…

We audited Mortgage Lending Direct, Inc. (MLD), a nonsupervised lender (see footnote -1)located in Florham Park, NJ, in support of the U.S. Department of Housing and Urban Development (HUD), Office of the Inspector General’s (OIG) goal of improving the integrity of the single-family insurance program. We selected MLD for audit because its 8.88 percent default rate for Federal Housing Administration (FHA)-insured single-family loans…

We audited the Second Northwest Cooperative Homes Association’s administration of the U.S. Department of Housing and Urban Development’s (HUD) Section 236 program based on a hotline complaint. Our audit objective was to determine if the Association properly identified and remitted excess income to HUD according to its regulatory agreement and whether it hired staff according to applicable HUD regulations. We found that the Association…

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…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited John Calvin Manor of Lee’s Summit, MO, in response to a request from HUD’s Office of Multifamily Housing in Kansas City, KS. Our audit objective was to determine whether the property violated its regulatory and loan agreement with HUD. The property violated its regulatory and loan agreements with HUD by improperly spending restricted…

We audited the U.S. Department of Housing and Urban Development’s (HUD) monitoring of its Multifamily Accelerated Processing program lenders. The audit was performed based on a hotline complaint and the Office of Inspector General’s annual audit and strategic plan to help HUD improve its fiscal responsibilities. The objective of the audit was to determine whether HUD adequately approved and selected program lenders to monitor. HUD…

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…

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…

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…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audited Five Star based upon a request from the HUD Denver Office of Multifamily Housing. The objective of our audit was to determine whether Five Star submitted the required monthly accounting and Section 236 excess income reports to HUD. Five Star did not submit required monthly accounting reports and Section 236 excess income reports to HUD.…

We audited TXL Mortgage Corporation, a nonsupervised direct endorsement lender located in Houston, TX. We selected TXL due to one of its loan correspondents’ high default rate. Our audit objectives were to determine whether TXL acted in a prudent manner and complied with U.S. Department of Housing and Urban Development (HUD) regulations, procedures, and instructions in the origination and sponsoring of Federal Housing…

The U.S. Department of Housing and Urban Development (HUD) – Office of Inspector General (OIG) reviewed 46 Federal Housing Administration (FHA) loans that Pierce Commercial Bank underwrote as an FHA direct endorsement lender. Pierce was a supervised FHA direct endorsement lender located in Tacoma, WA. This case was referred to us by OIG’s Office of Investigation. Our review objective was to determine whether Pierce underwrote 46…