Require indemnification for the 26 loans that had significant servicing deficiencies. In these cases, the loss to HUD was $1,673,117 (appendixes A and D).
Publication Report
2017-LA-0004 | September 14, 2017
HUD Did Not Have Adequate Controls To Ensure That Servicers Properly Engaged in Loss Mitigation
We audited the U.S. Department of Housing and Urban Development’s (HUD) oversight of servicers’ use of loss mitigation programs. The audit was initiated in response to an Office of Inspector General preaudit analysis of HUD data, which determined… moreRelated Recommendations
Housing
- Status2017-LA-0004-001-AOpenClosedClosed on September 30, 2020$120,902,564.00Funds 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.
Revise servicing review and monitoring policies and procedures to emphasize increased controls on reviewing claim loans showing that no loss mitigation evaluation occurred. Revising the policies and procedures would reduce the risk to HUD and result in a projected $120,902,564 in funds to be put to better use (appendix A).
Develop and implement policies and procedures to ensure that the Office of Single Family Asset Management and Office of Lender Activities and Program Compliance communicate the results of their servicing reviews to each other.
Update and revise policies and procedures, including reinforcement of guidance (for example, mortgagee letters, notifications to servicers, or training) to ensure that servicers accurately report the status of delinquent loans to HUD.
Reinforce existing guidance (such as mortgagee letters, notifications to servicers, and training) to servicers to ensure that they engage in required loss mitigation.
- Status2017-LA-0004-001-FOpenClosed
Require that the servicers with significant and other deficiencies revise and update their policies and procedures, as necessary, to ensure that they comply with HUD requirements and guidance on loss mitigation evaluation.