We audited the Federal Housing Administration (FHA), Office of Asset Sales’ U.S. Department of Housing and Urban Development (HUD)-Held Vacant Loan Sales (HVLS) program.  The audit objective was to assess the extent to which HUD achieved its mission objectives for a 2022 vacant loan sale.  We noted deficiencies in 52 of 53 HUD-approved applications within the reviewed vacant loan sale.  These deficiencies occurred in transactions…

We audited the U.S. Department of Housing and Urban Development (HUD), Office of Single Family Housing’s Federal Housing Administration (FHA) Resource Center’s handling of housing discrimination inquiries.  We initiated the audit to assist HUD with ensuring that the FHA Resource Center (1) provided accurate and complete information on potential housing discrimination to its customers and (2) ensured that instances of potential housing…

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,…

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 audited Ofori & Associates, PC, regarding its U.S. Department of Housing and Urban Development (HUD) real estate-owned (REO) Management and Marketing (M&M) III program. This review was part of the Office of Inspector General’s efforts to improve the integrity of the single-family insurance program. Our audit objective was to determine whether Ofori complied with case processing requirements and timeframes to obtain the highest net…

We audited Prysma Lending Group, LLC, a nonsupervised lender, located in Danbury, CT, in support of the U.S. Department of Housing and Urban Development (HUD), Office of Inspector General’s (OIG) goal of improving the integrity of the single-family insurance program. We selected Prysma for audit because its 3.28 percent default rate for Federal Housing Administration (FHA)-insured single-family loans with beginning amortization dates between…

We conducted a review of Federal Housing Administration (FHA) loans underwritten by Webster Bank (Webster), an FHA direct endorsement lender. This review was conducted as part of our “Operation Watchdog” initiative to review the underwriting of 15 direct endorsement lenders at the suggestion of the FHA Commissioner. The Commissioner expressed concern regarding the increasing claim rates against the FHA insurance fund for failed loans. The…

We audited the Milford, Connecticut, branch office of Countrywide Bank, FSB (Countrywide), which is a supervised national bank approved by the U.S. Department of Housing and Urban Development (HUD) to originate, underwrite, and service Federal Housing Administration (FHA) single-family insured loans. We selected the Milford, Connecticut, branch office largely based on a lender risk analysis, which showed that the loans it originated had a higher…