Investigate the 14 loans with unpaid mortgage amounts totaling $3,035,819, and require the lenders to obtain the borrowers consent, reinstate the insurance coverage, or take other action as appropriate given the facts of each particular loan.
Publication Report
2017-KC-0003 | May 22, 2017
HUD Did Not Ensure That Lenders Properly Processed Voluntary Terminations of Insurance Coverage on FHA Loans and Disclosed All Implications of the Terminations to the Borrowers
The U.S. Department of Housing Urban Development (HUD), Office of Inspector General audited HUD to determine whether it ensured that lenders properly processed voluntary terminations of insurance coverage on single-family Federal Housing Administration… moreRelated Recommendations
Housing
Remind lenders that voluntary termination is not the correct termination type to record third-party sales and that borrower consent is required to terminate insurance, even if the loans are indemnified.
Improve its procedures for detecting and sanctioning improper voluntary terminations.
- Status2017-KC-0003-002-AOpenClosedClosed on September 30, 2021$285,215.00Funds Put to Better Use
Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.
Update Handbook 4000.1 to require the voluntary termination of insurance consent form to include an explanation that voluntary termination differs from mortgage insurance premium cancellation and the disclosure of any outstanding partial claims to put $285,215 to better use.