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Report Fraud, Waste and Abuse
  • Recommendation Number: 2017-NY-1011-001-C
  • Status: Closed
  • Date Issued: September 20, 2017
Closed Date:
January 08, 2018

We recommend that the Deputy Assistant Secretary for Single Family Housing require MB Financial to update its policies and procedures to ensure that its staff understands underwriting requirements and the requirement that loans be manually underwritten when a refer decision is received from automated underwriting systems or when a loan is downgraded to a manual underwrite.

Publication Report

2017-NY-1011 | September 20, 2017

MB Financial Bank, Rosemont, IL, Did Not Always Follow HUD’s Underwriting Requirements but Generally Complied With Quality Control Requirements

We audited MB Financial Bank, a Federal Housing Administration (FHA)-approved direct endorsement lender, as part of our efforts to protect the integrity of the U.S. Department of Housing and Urban Development’s (HUD) single-family housing mortgage… more

Related Recommendations

Housing

  •  
    Status
      Open
      Closed
    2017-NY-1011-001-A
    Closed on September 20, 2017
    $178,811.00
    Funds 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.

    We recommend that the Deputy Assistant Secretary for Single Family Housing require MB Financial to indemnify HUD against potential losses of $178,811 for the four loans that did not comply with underwriting requirements (appendix C). HUD provided us copies of the four executed indemnification agreements in August and September 2017. Therefore, upon issuance of this report, we will enter a management decision into HUD’s Audit Resolution and Corrective Action Tracking System, along with copies of the indemnification agreements, and close this recommendation.

  •  
    Status
      Open
      Closed
    2017-NY-1011-001-B
    Closed on January 08, 2018

    We recommend that the Deputy Assistant Secretary for Single Family Housing require MB Financial to provide training to its underwriters on HUD’s underwriting requirements for approving and rejecting loans.

  •  
    Status
      Open
      Closed
    2017-NY-1011-002-A
    Closed on January 08, 2018

    We recommend that the Deputy Assistant Secretary for Single Family Housing require MB Financial to update its quality control plan to include the specific procedures to be used when reviewing rejected loan applications.