We completed an audit of Jersey Mortgage Company (Jersey Mortgage), a nonsupervised lender located in Cranford, New Jersey. The audit objectives were to determine whether Jersey Mortgage (1) approved Federal Housing Administration (FHA)-insured loans in accordance with the requirements of the U.S. Department of Housing and Urban Development (HUD)/FHA, which include adherence to prudent lending practices, and (2) developed and implemented a…

We audited the City of Altoona, Pennsylvania’s (City), Community Development Block Grant (CDBG) program based on a citizen complaint. Our audit objective was to determine if the City properly paid a subrecipient for eligible CDBG activities. We found that the City paid a subrecipient $914,335 for CDBG activities that it could not demonstrate were eligible. The City could not demonstrate that it paid a subreicipient for eligible activities that…

The City of Aurora, Colorado will receive more than $1.6 million in Recovery Act funding to carry out its Homelessness Prevention and Rapid Re-Housing Program and perform additional activities under its Community Development Block Grant (CDBG) program. HUD's Office of Inspector General (OIG) evaluated the City's capacity to administer its Recovery Act funds. The OIG did not find evidence to indicate that the City lacked the capacity to…

The U.S. Department of Housing and Urban Development's (HUD) Office of Inspector General performed an audit of Custom Closing Services, Incorporated (Custom), a contractor closing sales of HUD real estate-owned properties in the state of Michigan. The audit was conducted based on a complaint to our hotline alleging that Custom caused significant delays in the closing of HUD homes in Michigan. Our audit objective was to determine whether Custom…

We audited selected controls within the Disaster Recovery Grant Reporting system (DRGR) related to Neighborhood Stabilization Program (NSP) funding because of the emergency and the transparency nature of the Housing and Economic Recovery Act and the American Recovery and Reinvestment Act, respectively, and corresponding statutory timeframes. DRGR is an existing system that was modified to track close to $5.9 billion dollars of NSP funds, the…

In response to a congressional request, we audited the Federal Housing Administration (FHA) Title II single-family lender approval process. We wanted to know whether the application process provided effective controls and procedures to ensure approval of only those lenders meeting program requirements. Our audit found that FHA needs to improve the lender approval process. The process did not have sufficient controls and procedures to ensure…

The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General audited HUD’s oversight of the Federal Housing Administration (FHA)-insured home equity conversion mortgages (HECM) program. We initiated the audit as part of the activities in our 2008 annual audit plan. Our audit objective was to determine whether HUD had adequate oversight of the underwriting of HECM loans. This is the second of two audit reports…

We reviewed Federal Housing Administration (FHA)-insured home equity conversion mortgages (HECM) loans originated by First Call Mortgage Company and sponsored by James B. Nutter & Company (J.B.Nutter) during the period of January 2007 to December 2008. We reviewed these loans because in September 2008 state banking regulators from New Hampshire and Massachusetts found that First Call used deceptive business practices and did not have the…

We conducted a capacity review of the operations of the City of Brockton’s (City) grantee, Building a Better Brockton, Inc. (recipient), which has responsibility for administering the City’s NSP. Our objective was to determine whether the City and/or its recipient had the capacity to effectively and efficiently administer its NSP under the provisions of the Housing and Economic Recovery Act of 2008 (HERA) and the American Recovery and…

We audited the Municipality of Rio Grande’s (Municipality) Community Development Block Grant (Block Grant) program. We selected the Municipality for review as part of our strategic plan. The objectives of the audit were to determine whether the Municipality complied with U.S. Department of Housing and Urban Development (HUD) regulations, procedures, and instructions related to the administration of the Block Grant program and whether the…

Adams County, Colorado will receive more than $1.3 million in Recovery Act funding to carry out its Homelessness Prevention and Rapid Re-Housing Program and to provide additional funding to its Community Development Block Grant (CDBG) program. HUD's Office of Inspector General (OIG) evaluated the County's capacity to administer its Recovery Act funds. The OIG found weaknesses that could significantly affect the County’s capacity to administer…

The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General reviewed the front-end risk assessment (assessment) for the Neighborhood Stabilization Program 2 (NSP2). Our objective was to determine whether the assessment complied with the Office of Management and Budget’s (OMB) updated guidance for the American Recovery and Reinvestment Act of 2009 (Recovery Act), as well as HUD’s streamlined assessment process. Our…

The U. S. Department of Housing and Urban Development's (HUD) Office of Inspector General evaluated the front-end risk assessment for the Community Development Block Grant Recovery (CDBG-R) grant. Our objective was to determine whether the assessment complied with the Office of Management and Budget’s (OMB) updated guidance for the American Recovery and Reinvestment Act of 2009 (Recovery Act), as well as HUD’s streamlined assessment process.…

We performed an audit of the City of Boston’s (City) Department of Neighborhood Development (Department). We selected the City based upon the results of our previous audit of the City’s HOME Investment Partnerships Program (HOME) and the significance of the Neighborhood Stabilization Program (NSP) funds awarded. Our objective was to determine whether the City had the capacity to effectively and efficiently administer its NSP under the…

We audited the City of Altoona, Pennsylvania’s (City) capacity to administer funds it receives under the American Recovery and Reinvestment Act of 2009 (Recovery Act). The City will receive $1.3 million in Recovery Act funds to carry out Community Development Block Grant and Homelessness Prevention Rapid Re-Housing activities. Our objective was to determine whether the City had adequate capacity and controls to adequately administer its…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audited Adams County, Colorado’s Community Development Block Grant (Block Grant) program to determine whether Adams County’s Community and Economic Opportunity Department (Department) had adequate controls over the administration of its Block Grant funds. The Department did not have adequate controls over its Block Grant funds. Specifically, it did not (1…

The U.S. Department of Housing and Urban Development's Office of Inspector reviewed Cook County’s (County) Neighborhood Stabilization Program. The review was part of the activities in our fiscal year 2009 annual audit plan. We selected the County based upon the results of our three previous audits of the County’s HOME Investment Partnerships Program (HOME). Our objective was to determine whether the County had the capacity to effectively and…

We audited the State of Washington’s Neighborhood Stabilization Program. The audit was part of our fiscal year 2009 annual audit plan. We selected the State because it was responsible for the distribution of funds to the entitlement areas, as well as to nonentitlement areas for the state of Washington. Our objective was to determine whether the State’s Program implementation was compliant with U.S. Department of Housing and Urban Development…

We audited FHA-insured loan processes at two DHI Mortgage Company, LTD (DHI Mortgage) branches in Tucson and Scottsdale, Arizona, to determine whether DHI Mortgage originated, approved, and closed FHA-insured single-family loans in accordance with HUD requirements. We chose DHI Mortgage because the Scottsdale, Arizona, branch had a default rate that was double the default rate for FHA-insured loans for the state of Arizona, and then expanded…