The U.S. Department of Housing and Urban Development, Office of Inspector General selected HUD’s Federal Housing Administration, Single Family Claims Branch, for audit based on an internal audit suggestion expressing concern that HUD may not have policies, procedures, or systems to identify and address funds held by lenders and submitted as part of a claim.  Our audit objective was to determine whether FHA had adequately reduced mortgage insurance claims for funds held by lenders.

FHA had adequately reduced mortgage insurance claims for funds held by lenders.  FHA’s controls were adequate to ensure that escrow deduction amounts listed on the claim forms were correct.  We found no discrepancies in the claims reviewed.

This report contains no formal recommendations, and no further action is nescessary.