The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), reviewed preforeclosure sales under the Federal Housing Administration (FHA) program in the St. Louis, MO, area.  We found that the realtor for the preforeclosure sale entered into a consulting agreement with the purchaser of the property.  The agreement required that when the purchaser later sold the property, he would pay half of the net proceeds from that sale to the realtor’s consulting company.    

On December 17, 2015, HUD served a complaint on the realtor seeking a penalty and an assessment under the Program Fraud Civil Remedies Act.  The complaint alleged that she made a false certification on the closing worksheet and multiple false statements in the arm’s-length affidavit.

HUD and the realtor entered into a settlement as both parties mutually desired to avoid further expense and litigation and to reach a satisfactory resolution of this matter.  The settlement agreement did not constitute an admission of liability or fault on the part of any party and was voluntary and entered into by the realtor after due consideration of the terms of the agreement.  The realtor agreed to pay HUD $26,500.