We audited the Federal Housing Administration (FHA)-insured loan process at Universal American Mortgage Company (lender) to determine whether the lender complied with U.S. Department of Housing and Urban Development (HUD) regulations, procedures, and instructions in the origination and quality control review of FHA-insured loans. The review was part of our efforts to improve the integrity of the single-family insurance programs. We selected…

We completed an audit of All American Home Mortgage Corp., a nonsupervised lender located in Brooklyn, NY. Our audit objectives were to determine whether All American officials (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, and (2) implemented a quality control plan in accordance with HUD-FHA requirements. All American…

HUD OIG conducted an evaluation of Home Equity Conversion Mortgage (HECM) Loan Payments Made After Death of Borrower. A HUD OIG query of the HUD Single Family Data Warehouse (SFDW) disclosed that servicers of home equity conversion mortgages  were making payments to borrowers after the borrowers’ date of death.  Therefore, the Inspections and Evaluations Division conducted a review to validate the HECM data and to determine whether…

We completed an audit of Ameritrust Mortgage Bankers, Inc., a nonsupervised lender* located in Lake Success. Our audit objectives were to determine whether Ameritrust officials (1) approved FHA-insured loans in accordance with the requirements of the U.S. Department of Housing and Urban Development (HUD)-FHA, and (2) implemented a quality control plan in accordance with HUD-FHA requirements. Ameritrust officials did not always approve FHA-…

We reviewed alleged violations of U.S. Department of Housing and Urban Development (HUD) real estate-owned (REO) owner-occupancy program requirements by the subject (name withheld for privacy reasons). We concluded that the subject failed to comply with the HUD REO program requirement that an individual who purchases a REO home during its initial offering period must be the owner-occupant of the purchased home for one full year. In April 2011…

We audited the U.S. Department of Housing and Urban Development’s (HUD) management procedures, practices, and controls related to the Recovery Act Management and Reporting System (RAMPS). Our objective was to assess its capability to record and provide data required by the American Recovery and Reinvestment Act of 2009 on which HUD is required to report. Overall, RAMPS had the capability to record Recovery Act data and produce the reports…

The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General audited Mountain States Mortgage Center to determine whether it underwrote insured loans in compliance with HUD requirements and whether its quality control plan met HUD requirements. Mountain States underwrote 41 loans that did not comply with FHA requirements. Of the 41 FHA-insured loans reviewed, one of the loans had a significant underwriting…

We audited the Office of the Chief Procurement Officer’s (procurement office) procedures for closing out completed and expired Government National Mortgage Association (Ginnie Mae) contracts in compliance with applicable regulations. This audit was part of our audit plan for fiscal year 2010. Our objective was to determine whether the procurement office performed timely closeouts on completed and expired Ginnie Mae contracts. The procurement…

The U. S. Department of Housing and Urban - Office of Inspector General audited the Federal Housing Administration’s (FHA) Title II single-family lender renewal process. Our objective was to determine whether FHA’s Lender Approval and Recertification Division’s (Division) controls were adequate for determining whether lenders met FHA annual renewal requirements. The Division had taken significant steps to strengthen its controls over the…

We audited Federal Housing Administration (FHA)-insured loans underwritten by Prospect Mortgage, LLC (Prospect), within Region IV of the U. S. Department of Housing and Urban Development (HUD) Office of Inspector General (OIG). Our objective was to determine whether Prospect complied with HUD’s requirements for (1) origination and underwriting relative to cash assets, income, and creditworthiness; (2) quality controls; and (3) branch office…

HUD OIG performed an audit of Crossfire Financial Network, Inc., d/b/a CFN Mortgage Capital (Crossfire), a Federal Housing Administration (FHA) approved direct endorsement lender located in Miami, Florida. The review was performed based on the lender’s volume of loans underwritten and its default rate. The purpose of the audit was to determine whether the lender followed the U.S. Department of Housing and Urban Development’s (HUD) requirements…

HUD OIG performed an audit of Crossfire Financial Network, Inc., d/b/a CFN Mortgage Capital (Crossfire), a Federal Housing Administration (FHA) approved direct endorsement lender located in Miami, Florida. The review was performed based on the lender’s volume of loans underwritten and its default rate. The purpose of the audit was to determine whether the lender followed the U.S. Department of Housing and Urban Development’s (HUD)…

We performed a limited review of Wells Fargo Home Mortgage (Wells Fargo) as a result of our internal audit of the Federal Housing Administration’s (FHA) Home Affordable Modification Program (HAMP). During the audit, we visited Wells Fargo and reviewed a limited number of loans to determine whether the National Servicing Center implemented and operated FHA-HAMP in accordance with rules and regulations. Our objective for this limited review was…

We audited the Office of the Chief Procurement Officer’s (procurement office) administration of interagency agreements (IAAs). This audit was part of our fiscal year 2010 audit plan because of congressional hearings on the use and management of IAAs throughout the Federal Government. Our objective was to determine whether the U.S. Department of Housing and Urban Development (HUD) effectively administered its IAAs and the costs to procure these…

We audited the U.S. Department of Housing and Urban Development’s (HUD) compliance with obligation deadlines and progress toward meeting expenditure requirements related to eight programs funded by the American Recovery and Reinvestment Act of 2009 (ARRA). The objectives of our review were to determine whether HUD obligated ARRA funds in accordance with applicable deadlines and to assess HUD’s oversight of grantees’ expenditure of ARRA funds…

We audited the U.S. Department of Housing and Urban Development’s (HUD) preclosing and postclosing loan review of new Federal Housing Administration (FHA) direct endorsement lenders to determine whether HUD followed its guidance when (1) reviewing the initial loans underwritten by new FHA direct endorsement lenders and (2) performing the postendorsement technical review of all of the initial loans endorsed by newly approved direct endorsement…

We performed a limited review of Midland Mortgage Company (Midland) as a result of our internal audit of the Federal Housing Administration (FHA) – Home Affordable Modification Program (HAMP). Our objective was to determine whether Midland followed U. S. Department of Housing and Urban Development (HUD) rules and regulations when processing defaulted loans for the FHA-HAMP loss mitigation option. Overall, Midland complied with FHA-HAMP rules…

We audited the U. S. Department of Housing and Urban Development’s (HUD’s) National Servicing Center’s (NSC) Federal Housing Administration (FHA)-Home Affordable Modification Program (HAMP) as a part of our annual audit plan. Our objective was to determine whether the NSC implemented and operated FHA-HAMP in accordance with rules and regulations. Overall, the NSC implemented and operated FHA-HAMP in accordance with the necessary rules and…

The U.S. Department of Housing and Urban Development (HUD) audited PNC Mortgage (PNC), a Federal Housing Administration (FHA)-approved nonsupervised lender and servicer. We selected PNC for audit based on a citizen’s complaint regarding National City Mortgage Corporation (National City). PNC acquired National City in December 2008. Therefore, the report will be addressed to the current entity. Our objective was to determine whether PNC…

We audited the underwriting of a $45.6 million mortgage loan that was acquired by Deutsche Bank Berkshire Mortgage, Inc. (the Lender) to rehabilitate Wingate Towers and Garden Apartments. The audit was performed based on a request from the U.S. Department of Housing and Urban Development’s (HUD) Office of Multifamily Development. The Lender acquired and became responsible for the loan origination activities, personnel, books and records…