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 Luther Towers II because it was a high-risk multifamily project that received low inspection and financial assessment scores on our multifamily risk assessment for projects within our region 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 U.S. Department of Housing and Urban Development (HUD) requirements. The owner of Luther…

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 Newark, Delaware, branch office (branch office) of J.P. Morgan Chase bank (J.P. Morgan Chase), a supervised direct endorsement lender approved to originate Federal Housing Administration (FHA) single-family mortgage loans. We selected the branch office because its default rate was above the state’s average default rate. Our objective was to determine whether J.P. Morgan Chase complied with U.S. Department of Housing and Urban…

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…

We audited the Newark, Delaware, branch office (branch office) of Wells Fargo Home Mortgage (Wells Fargo). The branch office is mainly responsible for underwriting loans for 22 Wells Fargo sales branch offices in Pennsylvania. We selected the branch office because of its relatively high default rate, compared with the average default rate for the state of Pennsylvania. Our objective was to determine whether the branch office complied with U.S.…

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…