The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited Bank of America because it has released more than 47,000 Federal Housing Administration (FHA)-insured loans into the Distressed Asset Stabilization Program (DASP) note sales program.  Since its inception, DASP has facilitated the sale of more than 108,000 FHA loans, which means that Bank of America accounts for nearly half of the entire program…

We audited BLM Companies LLC, a contracted field service manager in HUD’s real estate-owned Management and Marketing III program, as part of the activities included in our 2017 annual audit plan and because it was the sole contractor performing property preservation and protection services for U.S. Department of Housing and Urban Development (HUD)-acquired properties located in Ohio.  Our audit objective was to determine whether BLM…

We audited JPMorgan Chase’s (Chase) Federal Housing Administration Home Affordable Modification Program (FHA-HAMP) stand-alone partial claims.  We selected Chase for review based on our analysis of risk factors of loan servicers that filed FHA-HAMP stand-alone partial claims and in accordance with our annual audit plan.  Our audit objective was to determine whether Chase complied with the FHA-HAMP stand-alone partial claim market rate…

We conducted an audit of BLM Companies LLC’s controls and performance under its Management and Marketing III program field service manager contract with the U.S. Department of Housing and Urban Development (HUD) for area 1D.  Area 1D included HUD real estate-owned and custodial properties in New Mexico, North Texas, Utah, and Colorado.  During the audit period, BLM held 7 of 18 HUD field service manager contracts throughout the Nation…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Department of Justice (DOJ), Washington, DC, and the U.S. Attorney’s Office for the Middle District of Florida in a civil investigation of Financial Freedom Acquisition, a division of CIT Bank, N.A.  Financial Freedom was originally owned by IndyMac Bank until its failure in 2008, when the Federal Deposit Insurance Corporation…

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 for the District of New Jersey in a civil investigation of Security National Mortgage Company.  Security National is a Federal Housing Administration (FHA)-approved mortgage lender with its principal place of business located in Salt Lake City, UT. On…

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, District of Colorado, in the civil investigation of Primary Residential Mortgage, Inc.  Primary has its principal place of business in Salt Lake City, UT.  Primary became an FHA-approved direct endorsement lender on October 15, 1998.  The direct…

Based on a request from the Assistant U.S. Attorney’s Office in Salt Lake City, UT, we provided information about single-family lenders with high default rates. We then reviewed the available case binders for 38 loans for which the Federal Housing Administration (FHA) had paid claims that were underwritten by City First Mortgage Services, LLC. We completed the review and referred alleged violations to the U.S. Department of Housing and Urban…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted in an investigation into alleged violations by Reverse Mortgage Solutions, Inc., of Federal Housing Administration (FHA) regulations related to its Home Equity Conversion Mortgage (HECM) program.  The investigation began due to a qui tam filed under the False Claims Act, 31 U.S.C. (United States Code) 3729, in the U.S. District Court for…

We audited Cornerstone Home Lending, formerly known as Cornerstone Mortgage Company.  We selected Cornerstone based upon a high default rate at Cornerstone’s Branch 87 in 2007 through 2009.  Our audit objectives were to determine whether Cornerstone (1) complied with HUD and Federal Housing Administration (FHA) regulations when originating and underwriting FHA-insured mortgages and (2) implemented a quality control plan that met…

We conducted a limited review of Federal Housing Administration (FHA) loans underwritten by CTX Mortgage Company LLC. We selected the lender based on the results of an auditability survey, which determined that CTX Mortgage allowed prohibited restrictive covenants to be filed against Federal Housing Administration (FHA)-insured properties. The objective of our review was to determine the extent to which CTX Mortgage failed to prevent the…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audited the Utah Housing Corporation in response to a hotline complaint. The complaint contained allegations that the Corporation commingled funds from the FHA first mortgages and the downpayment assistance second mortgages and serviced the second mortgages before the FHA first mortgages by using the first mortgage payments to pay the second mortgage. The…

We audited SWBC Mortgage Corporation, a Federal Housing Administration (FHA) direct endorsement lender in San Antonio, TX. We selected the lender for audit because as of September 30, 2011, it had 25 seriously delinquent loans. Our objective was to determine whether the lender originated single-family home loans in accordance with U. S. Department of Housing and Urban Development (HUD) and FHA requirements for loans with amortization dates…

We audited J&M Mortgage Brokers, Ltd., dba Mortgages USA, a Dallas, TX-based nonsupervised direct endorsement lender. We selected J&M because it had a high rate of defaults and claims within the first year. Our audit objectives were to determine whether J&M originated Federal Housing Administration (FHA)-insured single family mortgages in accordance with U. S. Department of Housing and Urban Development (HUD) regulations,…

We performed an audit of PrimeLending, A PlainsCaptial Company, located in Dallas, TX, a Federal Housing Administration (FHA) direct endorsement lender. We selected PrimeLending for audit because of its high default rate in the Houston, Dallas, and Fort Worth, TX, offices as compared to the average default rate for all FHA loans in those offices. Our objective was to determine whether PrimeLending complied with U. S. Department of Housing and…

We audited TXL Mortgage Corporation, a nonsupervised direct endorsement lender located in Houston, TX. We selected TXL due to one of its loan correspondents’ high default rate. Our audit objectives were to determine whether TXL acted in a prudent manner and complied with U.S. Department of Housing and Urban Development (HUD) regulations, procedures, and instructions in the origination and sponsoring of Federal Housing Administration (FHA)-…

We audited AmericaHomeKey, Inc., a Federal Housing Administration (FHA) direct endorsement lender in Dallas, TX. We selected AmericaHomeKey for audit because during our review of Gold Financial Services (2011-FW-1002), an AmericaHomeKey branch office, we identified three loans originated by one of its underwriters that contained underwriting and valuation deficiencies. Our objective was to determine whether AmericaHomeKey originated…

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 performed an audit of WR Starkey Mortgage, LLP (WR Starkey), located in Plano, TX, a Federal Housing Administration (FHA) direct endorsement lender. We selected WR Starkey for audit because of its high default rate of nearly 4.5 percent as compared to the average default rate for all FHA loans in Fort Worth, TX, of 4.1 percent. Our objective was to determine whether WR Starkey complied with U. S. Department of Housing and Urban Development…

As part of our annual audit plan objective of improving the integrity of single-family insurance programs, we reviewed the independent public accountant’s working papers and the financial statements of Allied Home Mortgage Capital Corporation (Allied) for fiscal year 2009. The objective of the review was to determine whether Allied’s fiscal year 2009 financial statements submitted to the Federal Housing Administration (FHA) accurately reported…