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Date Issued

Housing

  •  
    Status
      Open
      Closed
    2017-DE-1003-002-A

    Perform an analysis of all security deposits and ensure that the security deposit account is fully funded.

  •  
    Status
      Open
      Closed
    2017-DE-1003-002-B

    Implement controls to ensure existing procedures are followed to maintain the project’s security deposit funds separately from all other accounts by depositing and disbursing all security deposit funds directly into and from the security deposit account.

Housing

  •  
    Status
      Open
      Closed
    2017-LA-1801-001-A
    $423,759
    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.

    Work with HUD to nullify the restrictions on conveyance that violate HUD policy or indemnify HUD. This action will protect HUD against future losses of $418,277 for the eight loans.

  •  
    Status
      Open
      Closed
    2017-LA-1801-001-B
    $5,482
    Questioned Costs

    Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.

    Repay HUD $5,482 for partial claims paid on two FHA loans that contained prohibited restrictive covenants.

  •  
    Status
      Open
      Closed
    2017-LA-1801-001-C

    Develop and implement policies and procedures to identify prohibited restrictions on conveyance to ensure that it does not originate FHA loans with prohibited restrictive covenants.

  •  
    Status
      Open
      Closed
    2017-LA-1801-001-D

    Provide training to its employees regarding HUD’s requirements related to prohibited restrictions on conveyance.

Housing

  •  
    Status
      Open
      Closed
    2017-NY-1011-001-A
    $178,811
    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

    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-1011-001-C

    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.

  •  
    Status
      Open
      Closed
    2017-NY-1011-002-A

    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.

Housing

  •  
    Status
      Open
      Closed
    2017-LA-0004-001-A
    $120,902,564
    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.

    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).

  •  
    Status
      Open
      Closed
    2017-LA-0004-001-B

    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.

  •  
    Status
      Open
      Closed
    2017-LA-0004-001-C

    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.

  •  
    Status
      Open
      Closed
    2017-LA-0004-001-D
    $1,673,117
    Questioned Costs

    Recommendations with questioned costs identify costs: (A) resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B) that are not supported by adequate documentation (also known as an unsupported cost); or (C) that appear unnecessary or unreasonable.

    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).

  •  
    Status
      Open
      Closed
    2017-LA-0004-001-E

    Reinforce existing guidance (such as mortgagee letters, notifications to servicers, and training) to servicers to ensure that they engage in required loss mitigation.

  •  
    Status
      Open
      Closed
    2017-LA-0004-001-F

    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.

Housing

  •  
    Status
      Open
      Closed
    2017-CH-1006-001-A

    Implement adequate procedures and controls to ensure that memberships are sold at or below the fair market value and HUD’s secured interest in the memberships is appropriately valued.

  •  
    Status
      Open
      Closed
    2017-CH-1006-001-B

    Have a representative of HUD at the closing for membership sales to sign the HUD notes.

  •  
    Status
      Open
      Closed
    2017-CH-1006-001-C

    Develop and maintain a waiting list for rental units that meets the requirements of the resident home-ownership plan and considers the tenant profile.

  •  
    Status
      Open
      Closed
    2017-CH-1006-001-D

    Implement adequate procedures and controls to ensure that any rental units vacated by current households or units associated with memberships which were repurchased by the Cooperative and then remained vacant more than 6 months, are rented to very low-, low-, or moderate-income households selected from a waiting list for rental units that meets the requirements of the resident homeownership plan and considers the tenant profile.