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Report Fraud, Waste and Abuse
  • Recommendation Number: 2023-KC-0005-001-C
  • Status: Open
  • Date Issued: June 13, 2023

Provide additional guidance and training to servicers to address common loss mitigation issues found during this audit.

Publication Report

2023-KC-0005 | June 13, 2023

Servicers Generally Did Not Meet HUD Requirements When Providing Loss Mitigation Assistance to Borrowers With Delinquent FHA-Insured Loans

We performed an audit of loan servicers’ compliance with the Federal Housing Administration’s (FHA) requirements for providing loss mitigation assistance to borrowers after their COVID-19 forbearance ended.  We initiated the audit based on the… more

Related Recommendations

Housing

  •  
    Status
      Open
      Closed
    2023-KC-0005-001-A
    Closed on September 26, 2024

    Review the loans in our sample that did not receive appropriate loss mitigation options to ensure that the borrowers were remedied by the servicers, when possible, and take administrative actions if appropriate.

  •  
    Status
      Open
      Closed
    2023-KC-0005-001-B
    Closed on September 26, 2024

    Engage with the servicers in our sample to determine reasons for noncompliance and develop a plan to mitigate it going forward.

  •  
    Status
      Open
      Closed
    2023-KC-0005-001-D
    Closed on September 23, 2024

    Update HUD’s FHA FAQs to clarify current loss mitigation requirements and ensure that outdated guidance is removed.

  •  
    Status
      Open
      Closed
    2023-KC-0005-001-E

    Update the Save Your Home - Tips to Avoid Foreclosure brochure to include new loss mitigation options as they are introduced and require servicers to send this additional information to delinquent homeowners. This could be done as a redesign of the existing brochure or as addendums to the brochure for temporary programs.

  •  
    Status
      Open
      Closed
    2023-KC-0005-001-F
    Closed on December 14, 2023

    Design and implement a data-driven methodology to determine the appropriate mix of origination and servicing monitoring and desk reviews.