The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited CitiMortgage’s processing of partial claims.  Our audit objective was to determine whether CitiMortgage filed for partial claims only after completing the loan modifications and reinstating the loans. CitiMortgage improperly filed for 66 partial claims before completing the loan modifications and reinstating the loans. The Federal Housing…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Department of Justice (DOJ) and the U.S. Attorney’s Office for the Southern District of New York in a civil investigation of Residential Home Funding Corp.  Residential Home is a Federal Housing Administration (FHA)-approved mortgage lender having its principal place of business in White Plains, NY. On September 18, 2017,…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), reviewed preforeclosure sales under the Federal Housing Administration (FHA) program in the St. Louis, MO, area.  We found that the purchaser of a property being sold in a preforeclosure sale entered into a consulting agreement with the realtor.  The agreement required that when the purchaser later sold the property, he would pay half of the…

We reviewed Seneca Mortgage’s servicing of Federal Housing Administration (FHA)-insured mortgages and its implementation of the U.S. Department of Housing and Urban Development’s (HUD) Loss Mitigation program.  We selected Seneca Mortgage based on the results of our single-family risk assessment.  The objective of the audit was to determine whether Seneca Mortgage complied with HUD’s Loss Mitigation program requirements and…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Department of Justice, Washington, DC, and the U.S. Attorney’s Office, Western District of New York, in the civil investigation of Manufacturers and Traders Trust Company, also known as M&T Bank.  M&T Bank has its principal place of business in Buffalo, NY.   On March 19, 2013, a former employee of M&T Bank…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audited James B. Nutter & Company, a Federal Housing Administration (FHA) lender located in Kansas City, MO.  We selected James B. Nutter based on data analysis showing that the servicer might be completing foreclosures faster than the industry standard, which would suggest that it might not be fully using HUD’s loss mitigation tools.  Our…

We completed a review of First Niagara Bank’s servicing of Federal Housing Administration (FHA)-insured mortgages and its implementation of the U.S. Department of Housing and Urban Development’s (HUD) Loss Mitigation program.  We selected First Niagara Bank based on an Office of Inspector General risk assessment of single-family lenders.  The objective of the audit was to determine whether First Niagara Bank properly serviced FHA-…

HUD OIG assisted in an investigation into alleged violations of Federal Housing Administration (FHA) regulations applicable to the direct endorsement program by Golden First Mortgage Corporation and its owner.  Golden First is a former FHA-approved mortgage lender, with its principal place of business located in Great Neck, NY.  Golden First participated in the direct endorsement program from 1989 until 2010.  As a direct…

We assisted the U.S. Attorney’s Office, Southern District of New York, in conducting an investigation of JPMorgan Chase Bank, N.A., and JPMorgan Chase & Co. (Chase).  The investigation began due to a qui tam filing in the U.S. District Court for the Southern District of New York.  The False Claims Act allows private persons to file suit for violations of the False Claims Act on behalf of the Government.  A suit filed by an…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Attorney’s Office, Southern District of New York, in conducting a review of CitiMortgage, Inc. CitiMortgage is a direct subsidiary of Citibank, N.A., and Citibank is an indirect subsidiary of Citigroup. CitiMortgage is based in O’Fallon, MO. The review began due to a qui tam filing in the U.S. District Court for the Southern…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Attorney’s Office, Southern District of New York, in conducting a review of MortgageIT, Inc. MortgageIT is a residential mortgage banking company headquartered in New York City, NY. Originally founded in 1988, MortgageIT was acquired by Deutsche Bank in 2007, and was a HUD-approved Title II nonsupervised mortgage company. Its home…

As part of the Office of Inspector General’s (OIG) nationwide effort to review the foreclosure practices of the five largest Federal Housing Administration (FHA) mortgage servicers (Bank of America, Wells Fargo Bank, CitiMortgage, JP Morgan Chase, and Ally Financial, Incorporated) we reviewed CitiMortgage’s foreclosure and claims processes. In addition to this memorandum, OIG issued separate memorandums for each of the other four reviews. OIG…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited the 68 Federal Housing Administration (FHA) claims submitted by CitiMortgage, Inc., of O’Fallon, MO. Our audit objective was to determine whether Citi properly determined that borrowers were eligible to participate in the Preforeclosure Sale Program. We found that Citi improperly submitted claims totaling nearly $5 million for 63 of the 68…

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…

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 conducted a review of Federal Housing Administration (FHA) loans underwritten by Sterling National Mortgage Company, Inc. (Sterling), an FHA direct endorsement lender. The review was conducted as part of the Office of Inspector General’s (OIG) 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…

We reviewed 12 Federal Housing Administration (FHA) loans that American Sterling Bank (American) underwrote as an FHA direct endorsement lender. Our review objective was to determine whether American underwrote the 12 loans in accordance with FHA requirements. This review is part of Operation Watchdog, an Office of Inspector General (OIG) initiative to review the underwriting of 15 direct endorsement lenders at the suggestion of the FHA…

We audited Somerset Investors Corporation (Somerset), dba Somerset Mortgage Bankers, a Federal Housing Administration (FHA)-approved direct endorsement lender located in Melville, NY. The audit objectives were to determine whether Somerset (1) originated FHA-insured refinanced loans in accordance with the requirements of the U.S. Department of Housing and Urban Development (HUD)/FHA and (2) conducted quality control reviews that complied with…

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…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audited Midwest Mortgage Capital (Midwest). Our audit objectives were to determine whether Midwest followed HUD requirements for underwriting loans and performing its quality control program for single-family production. We concluded that Midwest did not properly underwrite 7 of the 29 defaulted loans reviewed. These loans had material underwriting…