We performed an audit of loan servicers’ compliance with the Federal Housing Administration’s (FHA) requirements for providing loss mitigation assistance to borrowers after their COVID-19 forbearance ended.  We initiated the audit based on the large number of borrowers exiting forbearance, because the loss mitigation programs available to these borrowers were new and created a risk for both borrowers and the FHA insurance fund when…

We audited the U.S. Department of Housing and Urban Development’s (HUD) temporary policy for endorsement of loans with COVID-19 forbearance activity because an analysis of data in HUD’s systems showed that there may have been loans that did not comply with the policy’s requirements.  The policy was one aspect of HUD’s broader emergency response to COVID-19, which also included an eviction moratorium and loan forbearance for borrowers…

The Office of Community Planning and Development (CPD) traditionally uses onsite monitoring to monitor its grantees.  However, in response to the coronavirus disease 2019 pandemic, CPD shifted to 100 percent remote monitoring.  Monitoring was momentarily paused in fiscal year (FY) 2020 and was reinstituted remotely in FY 2021. To support its remote monitoring approach, CPD launched the Grantee Document Exchange (GDX), an externally…

We conducted an attestation review of the U.S. Department of Housing and Urban Development’s drug control accounting for the fiscal year ended September 30, 2022.  We performed this review pursuant to section 705(d) of Public Law 105-277, which requires National Drug Control Program agencies to submit to the Director of ONDCP a detailed accounting of all funds spent by the agencies for National Drug Control Program activities during the…

We audited the U.S. Department of Housing and Urban Development’s (HUD) efforts to proactively communicate information related to the coronavirus disease of 2019 (COVID-19) to homeowners with Federal Housing Administration (FHA)-insured mortgages.  We initiated this work based on a U.S. Government Accountability Office report that identified helping borrowers understand the protections available to them as a key challenge and prior audit…

We performed a review of the U.S. Department of Housing and Urban Development’s (HUD) monitoring and tracking of Continuum of Care (CoC) grantees that have been slow to spend their grant funds.  Our objectives were to determine whether HUD was effectively tracking and monitoring CoC grant spending and to determine the impact of COVID-19 on CoC grantee spending.HUD generally tracked and monitored its grantees; however, it did not prioritize…

We audited the U.S. Department of Housing and Urban Development’s (HUD) Emergency Solutions Grants Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (ESG-CV) program. Our audit objective was to determine what challenges ESG-CV grant recipients faced in implementing the program and using grant funds. We used a survey questionnaire to gather feedback and insight directly from the 362 recipients of ESG-CV grants. At the time we…

Develop a control to detect loans that did not maintain the required flood insurance to put $1.5 billion to better use by avoiding potential future costs to the FHA insurance fund from inadequately insured properties. Corrective Action Taken In November 2022, FHA published the Acceptance of Private Flood Insurance for FHA-Insured Mortgages final rule (Docket No. FR-6084-F-02) in the Federal Register and issued Mortgagee Letter 2022-18,…

We audited the Los Angeles Homeless Services Authority’s Continuum of Care (CoC) program.  The audit was initiated because of the homelessness crisis in the City of Los Angeles, which has the highest number of unsheltered people in the United States.  In addition, the Los Angeles city controller issued a report in 2019, criticizing the Authority for falling short of City of Los Angeles homeless outreach goals.  (See Background and…

We audited the U.S. Department of Housing and Urban Development’s (HUD) oversight of Federal Housing Administration (FHA) refunds based on a hotline complaint alleging that HUD was trying to make it difficult for claimants to obtain refunds or discourage them from pursuing the refunds, which are due to eligible homeowners from the unearned portion of the upfront mortgage insurance premium paid.  Our audit found the allegations from the…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), completed an audit to determine whether FHA-insured borrowers properly received the COVID-19-related forbearance.  The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), signed into law on March 27, 2020, provided a mortgage payment forbearance option for all borrowers who suffered a financial hardship due to the COVID-19 national…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), completed a corrective action verification (CAV) of recommendations from four prior home equity conversion mortgage (HECM) audit reports.  The CAV was initiated because protecting the Federal Housing Administration (FHA) mutual mortgage insurance fund is one of HUD’s top management challenges.  The prior audits determined that HUD lacked…

We audited lender reporting of COVID-19 forbearances for Federal Housing Administration (FHA)-insured loans in the Single Family Default Monitoring System (SFDMS).  We compared default reporting data from SFDMS to loan data provided by five sampled servicing lenders that serviced a third of the FHA single-family portfolio.  Our audit objective was to determine whether COVID-19 forbearance data available in SFDMS were consistent with…

We prepared this memorandum to provide the Office of Housing at the U.S. Department of Housing and Urban Development (HUD) information regarding the opportunity to promote a homeless waitlist preference at Multifamily Housing rental assistance properties.  HUD has an opportunity to revisit the promotion and marketing of its homeless waitlist preference and the importance of partnering with a homeless service provider.  Additionally,…

In June 2020, we received letters from members of Congress, including the chairpersons of the House Committee on Financial Services and Oversight and Investigation Subcommittee, expressing concern that the U.S. Department of Housing and Urban Development (HUD) imposed a new, nonpublic, and legally erroneous policy that prohibited issuing Federal Housing Administration (FHA)-insured loans to Deferred Action for Childhood Arrivals (DACA)…

We prepared this memorandum to provide the Office of Housing at the U.S. Department of Housing and Urban Development (HUD) with key considerations from prior audits of the HUD Single Family Default Monitoring System (SFDMS) and the partial claim loss mitigation option.  These audits identified HUD’s lack of effective controls to ensure that lenders reported default information accurately and in a timely manner, lenders promptly filed and…

We audited Neighborhood Housing Services of Los Angeles County’s (NHSLA) Neighborhood Stabilization Program 2 (NSP2).  The audit was based on a complaint alleging questionable NSP2 financial activity, double payments to contractors, and payments to contractors for incomplete work.  Our Office of Audit received the referred complaint in late 2018.  However, because the complaint included concerns regarding activities and auditee…

The U.S. Department of Housing and Urban Development, Office of Inspector General, has completed its audit of Federal Housing Administration (FHA)-insured loans originated in calendar year 2019.  Our audit objective was to determine whether FHA insured loans that were not eligible for insurance because they did not have the required flood insurance coverage. We found FHA insured at least 3,870 loans that closed in 2019, totaling $940…

We initiated an audit of the U.S. Department of Housing and Urban Development’s (HUD) oversight of Federal Housing Administration (FHA) refunds to determine whether HUD appropriately, effectively, and efficiently tracked, monitored, and issued FHA refunds owed to homeowners with terminated loans. During the audit field work, the Coronavirus 2019 (COVID-19) pandemic began and as a result, we developed a second, more urgent audit objective to…

We conducted this limited review to identify the U.S. Department of Housing and Urban Development’s (HUD) Coronavirus Aid, Relief, and Economic Security Act (CARES Act) drawdown levels for the initial round of Emergency Solutions Grants (ESG) funding.  In addition, we researched information published by grantees on how they have used and will use their funds.  Our objective was to highlight the grantees’ (1) drawdown levels for…