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Report Fraud, Waste and Abuse
  • Recommendation Number: 2025-NY-1002-001-G
  • Status: Open
  • Date Issued: March 04, 2025

Provide indemnification agreements or documentation to support the 14 loans in which it identified material findings that it did not acceptably mitigate or self-report to HUD. Implementation of this recommendation will protect the FHA insurance fund from an estimated loss of $1,136,089.

Publication Report

2025-NY-1002 | March 04, 2025

LoanDepot.com Did Not Have a Sufficient Quality Control Program for FHA-Insured Loans

We audited loanDepot.com to evaluate its quality control (QC) program for originating and underwriting Single Family Federal Housing Administration (FHA)-insured loans.  We selected loanDepot for review based on its loan volume and delinquency rate… more

Related Recommendations

Housing

  •  
    Status
      Open
      Closed
    2025-NY-1002-001-A

    Update its QC plan and related processes and procedures to align with requirements for loan selection, including maintaining data and documentation showing how sample sizes and loan selections were determined.

  •  
    Status
      Open
      Closed
    2025-NY-1002-001-B

    Update its QC plan and related processes and procedures to align with requirements for (1) loan file reviews, (2) assessment of findings, (3) mitigation of findings, and (4) reporting findings to HUD when required.

  •  
    Status
      Open
      Closed
    2025-NY-1002-001-C

    Provide annual training to its staff and management on HUD requirements for lender QC programs and provide proof of training to HUD.

  •  
    Status
      Open
      Closed
    2025-NY-1002-001-D

    Conduct up to 1,190 additional post-closing QC reviews to meet sample size and composition requirements and submit the results to HUD, including all findings of fraud or material misrepresentation, along with any other material findings that it is unable to mitigate. If required, loanDepot should execute indemnification agreements or reimburse claims paid to help protect the FHA insurance fund from unacceptable risk.

  •  
    Status
      Open
      Closed
    2025-NY-1002-001-E

    Review the 32 EPD loans not previously selected for review and submit the results to HUD, including all findings of fraud or material misrepresentation, along with any other material findings that it is unable to mitigate. If required, loanDepot should execute indemnification agreements or reimburse claims paid to help protect the FHA insurance fund from unacceptable risk.

  •  
    Status
      Open
      Closed
    2025-NY-1002-001-F

    Evaluate its QC files for the 1,579 loans in which it identified material findings to confirm whether it self-reported to HUD all findings of fraud or material misrepresentation, along with any other material findings that its records did not show have been acceptably mitigated. If required, loanDepot should execute indemnification agreements or reimburse claims paid to help protect the FHA insurance fund from unacceptable risk.