We audited the U.S. Department of Housing and Urban Development (HUD), Office of Multifamily Housing Programs’ efforts to address multifamily mortgage application processing delays.  When applications for these loans are delayed, it slows the production and availability of affordable multifamily housing units.  During the COVID-19 pandemic, HUD took action to eliminate a backlog of over 500 applications waiting to be assigned to…

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)…

The West Calumet Housing Complex (WCHC), located in East Chicago, IN, was a public housing development that opened in 1972 on top of a former lead smelting plant.  HUD and other agencies missed multiple opportunities to identify site contamination at WCHC.  As a result, WCHC residents continued living in unsafe conditions for decades, and inadequate oversight led to the lead poisoning of children in WCHC.  Between 2005 and 2015, a…

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 Northern District of New York in a civil investigation of Gateway Funding Diversified Mortgage Services, LP, now known as Finance of America Mortgage, LLC (FAM).  Gateway was a Federal Housing Administration (FHA)-approved mortgage lender.  On May 31, 2015,…

We audited Diamond Park because of concerns raised by the U.S. Department of Housing and Urban Development’s (HUD) Departmental Enforcement Center regarding the management of the project and we had never audited it.  Our audit objective was to determine whether the owner managed the project in accordance with its regulatory agreement and HUD requirements.  We focused the audit on reviewing (1) participant eligibility and their…

We audited Schwenckfeld Manor because it was a high-risk multifamily project on our multifamily risk assessment for projects within our region and we had never audited it.  Our audit objectives were to determine whether the project owner (1) disbursed project funds for costs that were reasonable, necessary, and supported for the operation and maintenance of the project; and (2) properly disclosed identity-of-interest relationships. The…

We audited Laurentian Hall Apartments (project) because of its failure to submit financial statements in a timely manner and because we had never audited the project before.  Our audit objective was to determine whether the project’s owner managed the project in accordance with its U.S. Department of Housing and Urban Development (HUD)-held mortgage and other HUD requirements. The owner of Laurentian Hall Apartments did not always manage…

The Office of Inspector General (OIG) assisted the U.S. Attorney’s Office for the District of New Jersey in the investigation of Finance of America Mortgage LLC.  The investigation began due to a qui tam filing in the U.S. District Court for the District of New Jersey.  The relator alleged that Finance of America, through its acquisition of Gateway Funding Diversified Mortgage Services LLP, knowingly participated in a mortgage fraud…

We audited the Pennsylvania Housing Finance Agency’s implementation of the U.S. Department of Housing and Urban Development’s (HUD) Loss Mitigation program for loans insured by the Federal Housing Administration (FHA).  We conducted the audit because the Agency had the largest active portfolio and the largest number of delinquent loans for servicers located in Pennsylvania as of October 2014.  Our objectives were to determine whether…

We audited Four Freedoms House of Philadelphia, Inc.’s management of its Section 202 housing project. We selected Four Freedoms for an audit because we received a complaint alleging that it mismanaged its Section 202 housing project. Our audit objective was to determine whether Four Freedoms managed its Section 202 housing project according to the requirements of its regulatory agreement and applicable HUD requirements. We focused the audit…

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 Ally Financial, Incorporated’s foreclosure and claims processes. In addition to this memorandum, OIG issued separate memorandums for each of the other…

We audited the City of Reading's (City) asset control area program as part of a nationwide audit of the U.S. Department of Housing and Urban Development's (HUD) monitoring of program participants. Our objective was to determine whether the City administered its asset control area program in compliance with HUD requirements. We focused our review on whether the City complied with specific requirements in its asset control area agreement…

We reviewed lenders in the State of Connecticut that had Federal Housing Administration (FHA) loans with secondary financing from the Connecticut Housing Finance Authority as part of our annual audit plan. The objective was to determine whether the lenders inappropriately gave borrowers using secondary financing from the Connecticut Housing Finance Authority cash back at closing in excess of their total cash deposit and other closing costs paid…

Our audit objective was to determine whether Elders Place, Incorporated, (Elders Place, Inc.), administered project operating funds in accordance with U.S. Department of Housing and Urban Development (HUD) requirements. Elders Place, Inc., did not administer project operating funds in accordance with HUD requirements. It made more than $309,900 in unsupported disbursements and more than $73,400 in ineligible disbursements and, thereby, did not…

Attached is the final report on our audit of the Plymouth Meeting, Pennsylvania, branch of National City Mortgage (branch office), Audit Report Number 2008-PH-1002, dated November 20, 2007. We selected the branch office because its default rate was above the state's default rate. Our objective was to determine whether the branch office complied with U.S. Department of Housing and Urban Development (HUD) regulations, procedures, and…