Ensure that this information is distributed to delinquent borrowers so it can benefit the greatest number of borrowers to put $5.43 billion to better use by avoiding potential future losses on 112,160 loans.

Review the 21 loans with improperly administered forbearance to ensure that the borrowers were remedied by the servicers, if possible, and ensure that these servicers updated their forbearance procedures to prevent future noncompliance.

Ensure that the issues found during our audit are incorporated into QAD’s servicing monitoring reviews.

Provide additional guidance to the servicers so they will limit their communication and collection efforts for the borrowers in forbearance.

We recommend that the Office of Single Family Housing coordinate its efforts with the Office of Public and Indian Housing and the Office of Multifamily Housing Programs to further ensure that appropriate controls are in place to prevent HECM borrowers from violating principal residency requirements.

Request an opinion from HUD’s Office of the Chief Financial Officer’s Appropriation Law Division on whether the abnormal balance in account 4901 constitutes a violation of the Antideficiency Act.

Enhance standard operating procedures around system and account reconciliations to ensure that they cover all possible scenarios and are easy to follow.

Appropriately train and monitor new personnel to ensure that they understand and execute the procedures and controls.

Update procedures to clearly define error thresholds that require follow-up and the communication process for elevating errors to supervisors, managers, and senior leadership.

Establish clear lines of communication within and between divisions to ensure that all personnel become aware of issues that may impact their duties and responsibilities.

Strengthen controls over the preparation of HECM-related reconciliations, reviews, and oversight by ensuring that (1) program personnel preparing such reconciliations understand how such reconciliations impact financial accounting and reporting and (2) financial personnel sufficiently understand programs and systems to determine their general ledger impact.

Enhance the quarterly variance analysis to identify the business reasons for changes in account balances and pay specific attention to abnormal balances and activity.

Strengthen the financial statement review controls by completing a compliance matrix to ensure all balances that are presented and disclosed reflect the most up-to-date financial accounting and reporting guidance.

Perform a comprehensive analysis for all cohort years and assess the impact that the use of the scheduled UPB instead of the current UPB has on the LGL. If significant based on a quantitative threshold, update the SF cash flow model to incorporate the current UPB data.

Develop and implement a new process to require the annual validation of the fourth quarter endorsement volume estimation method for the SF Forward model. The process should include a management review and approval control component. The process should be documented and should demonstrate that management’s estimate is based on the analysis of past experiences, current policy, and market considerations, and, if necessary, incorporate improvement recommendations.

Perform a comprehensive review of the SF and HECM model documentation and update the specific sections with the current practices and procedures required to execute the model activities.

Establish a process that requires the timely review and update of model documentation. The process should include tracking the dates and nature of the revisions.

Provide training and periodic reminders to field staff and management to ensure that the data fields in DAP and on the final Form HUD-290 are accurate and consistent.

Develop and implement written procedures that provide guidance or best practices that should be followed to address data anomalies. At a minimum, these written procedures should include the following: (1) a process for identifying key data attributes that significantly impact the results, (2) the determination of preset thresholds for analyst and management attention, (3) the treatment of data anomalies, such as null values or values that exceed preset thresholds, (4) a process for providing feedback to the upstream data provider(s) for corrective and preventive actions when data integrity issues are detected and management concludes the issue is significant, and (5) a process for preparing documentation to support management decisions.

Develop a comprehensive process to ensure that complaints received by HUD’s Multifamily Housing Clearinghouse are resolved in a timely manner.

Status

In October 2023, the Office of Multifamily Housing reported that it had sought funding for system enhancements to coordinate tenant complaints. HUD is transitioning the Multifamily Clearinghouse responsibilities to the Federal Housing Administration (FHA) Resource Center. The FHA Resource Center has a system that will allow tracking and monitoring of customer calls. As of November 2024, the Office of Multifamily Housing requested the closure of this recommendation because it did not receive the requested funding for system enhancements, and its alternative action of using the FHA Resource Center to track and monitor customer calls did not work. As of January 2025, the Office of Multifamily plans to propose a revised management decision to HUD OIG with alternative actions to address the recommendation.

Analysis

To fully address this recommendation, HUD needs to develop a comprehensive process to ensure that complaints received by HUD are resolved in a timely manner.

Implementation of this recommendation will result in a timelier resolution of complaints submitted by those living in multifamily member housing units.