(Source: A new report from a government watchdog shows that mortgage servicers’ delays in foreclosing on properties and subsequent delays in the conveyance of those properties to the Federal Housing Administration may have cost the FHA as much as $2.23 billion in unnecessary payouts.

The report, issued late last week by the Department of Housing and Urban Development Office of Inspector General, found that HUD paid claims for an estimated 239,000 properties that servicers did not foreclose upon or convey on time.

And those delays cost the FHA an estimated $2.23 billion.

According to the HUD-OIG report, the watchdog reviewed a “statistical sample” of 90 claims by HUD out of nearly 250,000 loans that had indicators that they may have missed their deadlines during the past 5 years.

Of those 90 loans, 89 missed a foreclosure deadline, a conveyance deadline, or both, the HUD-OIG report showed.

Projecting that out over the roughly 250,000 loans that showed signs of a missed deadline means that HUD may have paid claims for 238,978 properties that servicers did not foreclose upon or convey on time.

According to the HUD-OIG report, HUD paid an estimated $141.9 million for servicers’ claims for “unreasonable and unnecessary debenture interest” that servicers incurred after missing a foreclosure or conveyance deadline.

The HUD-OIG report also showed that HUD paid out an estimated $2.09 billion for servicers’ claims for “unreasonable and unnecessary holding costs” that were incurred after the deadline to convey...