The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), conducted a review of a Federal Housing Administration (FHA) home equity conversion mortgage (HECM) underwritten by MetLife Home Loans, LLC. MetLife is an FHA-approved mortgage lender with its principal place of business located in Irving, TX.
On June 9, 2017, HUD notified MetLife and the borrower’s son of their potential liability under the Program Fraud Civil Remedies Act of 1986, 38 U.S.C. (United States Code) 3801-3812, for causing a false claim to be made regarding the eligibility of an FHA HECM loan. MetLife underwrote the loan and failed to ensure that the signatories to the loan had the legal authority to execute it. Specifically, the power of attorney through which the borrower’s son executed the loan required his sister’s signature as well as his own.
On November 3, 2017, MetLife entered into a settlement agreement to pay HUD $4,000 upon execution of the agreement. In addition, MetLife will indemnify and hold HUD harmless for any and all losses HUD incurs or has incurred in connection with the loan. The estimated potential loss is $95,769. On August 15, 2017, the borrower’s son entered into a settlement agreement to pay HUD $1,500.
Recommendations
General Counsel
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Status2018-CF-1801-001-AOpenClosed$4,000.00Questioned 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.
Closed on March 23, 2018Acknowledge that the attached settlement agreement for $4,000 represents an amount due HUD from MetLife.
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Status2018-CF-1801-001-BOpenClosed$95,769.00Funds 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.
Enforce the indemnification agreement in the attached settlement agreement to prevent an estimated $95,769 loss to HUD. This represents an amount due HUD from MetLife for indemnifying and holding HUD harmless for any and all losses HUD incurs or has incurred in connection with FHA loan number 137-4740973.
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Status2018-CF-1801-001-COpenClosed$1,500.00Questioned 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.
Closed on August 06, 2018Acknowledge that the attached settlement agreement for $1,500 represents an amount due HUD from the borrower’s son.