The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted HUD’s Office of General Counsel, Office of Program Enforcement, in the civil investigation of Southern Blvd I, L.P.  The owner executed a housing assistance payments contract for a 73-unit multifamily housing development named Southern Blvd I located in Bronx, NY.  The project received HUD project-based Section 8 assistance for 72…

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,…

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…

We audited Folts, Inc.’s management of the Folts Adult Home and Folts Home projects to address our concern with U.S. Department of Housing and Urban Development (HUD)-assisted health care facilities.  We selected this auditee as the result of a risk assessment of nursing homes located in New York State, which considered HUD’s risk indicators and factors such as loan default; internal control issues; and financial statements not being filed…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), referred alleged violations to HUD’s Office of Program Enforcement for action under the Program Fraud Civil Remedies Act based on two audits of DHI Mortgage Company Ltd.  (DHIM) that found it did not follow HUD requirements when it underwrote Federal Housing Administration (FHA)-insured loans with prohibited restrictive addenda to the purchase…

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 (OIG), assisted the U.S. Attorney’s Office for the Western District of New York in the civil investigation of Pilgrim Village Associates, L.P.; North-Ellicott Management, Inc.; and Trammell Property Management (Pilgrim Village). Pilgrim Village Associates, L.P., was the owner of Pilgrim Village Apartments, a 90-unit multifamily housing development located in…

We audited Morris Park Nursing and Rehabilitation Center based on a risk assessment we performed on nursing homes located in New York and New Jersey.  Morris Park has a Section 232 HUD-insured loan in the amount of $7.4 million.  The objective of the audit was to determine whether Morris Park officials managed funds in compliance with the regulatory agreement and applicable HUD requirements. Morris Park officials generally managed…

We audited Coconut Grove Apartments due to concerns expressed by the U.S. Department of Housing and Urban Development’s (HUD) Office of Multifamily Housing Programs regarding the management of the project.  The main concern was that the owner may have diverted project funds for nonproject expenses.  Our audit objective was to determine whether Coconut Grove’s owner operated its Sections 223(f) and 241(a)-insured multifamily rental…

We audited NOVA Financial & Investment Corporation based on a referral from the U.S. Department of Housing and Urban Development’s (HUD) Quality Assurance Division detailing a separate lender that originated Federal Housing Administration (FHA)-insured loans that contained ineligible downpayment assistance gifts.  The HUD Office of Inspector General’s (OIG) analysis identified NOVA as a lender with the highest origination volume in the…

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…

HUD OIG conducted a civil investigation of an alleged loan origination fraud scheme involving a cash-out refinance loan that was insured by the Federal Housing Administration (FHA).  FHA provides mortgage insurance on loans made by FHA-approved lenders to creditworthy borrowers.  Borrowers must occupy the properties as their primary residence for at least 1 year.  Borrowers certify to their intent to occupy the property when…

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, Office of Inspector General audited Allen Mortgage, Limited Liability Company, a Federal Housing Administration (FHA) nonsupervised lender. We selected Allen Mortgage for audit based on its high default and claim rate for the FHA-insured loans sponsored in Region 5. Our objectives were to determine whether (1) Allen Mortgage complied with HUD’s regulations, procedures, and instructions in…

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…

We audited the Federal Housing Administration (FHA)-insured loan process at MetLife Bank’s (lender) branch in Scottsdale, AZ, to determine whether the lender underwrote FHA-insured loans and implemented a quality control plan in accordance with U.S. Department of Housing and Urban Development (HUD) requirements. We selected the lender because it had an FHA default rate of 7.41 percent for loans underwritten in Arizona between April 1, 2009, and…

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 audited Westbeth Artists Houses (auditee) in response to a complaint submitted to the Office of Inspector General (OIG) hotline alleging that project funds were used to pay an executive director in violation of U.S. Department of Housing and Urban Development (HUD) regulations. Our audit objectives were to assess the merits of the complaint and determine whether project operations generally complied with HUD regulations pertaining to…