The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audited Englewood Apartments’ Project-Based Section 8 Rental Assistance program based on a request from HUD’s Region 7 Office of Multifamily Housing Programs.  HUD conducted a management and occupancy review in January 2018 to assess the overall quality of management and services provided in accordance with HUD guidelines and instructions. …

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 audited the Section 8 housing assistance payments program of the New Horizons project in Kansas City, MO.  Our objective was to determine whether New Horizons properly verified tenants’ eligibility, requested assistance only for tenants living in the units, retained tenant files for the required period, and properly collected and deposited tenant rents…

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…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited Majestic Management, LLC, located in St. Louis, MO. Our objective was to determine whether Majestic Management charged only the appropriate fees in managing the projects, properly procured goods and services, and disbursed project funds only for eligible and supported expenses. Majestic Management improperly charged fees to its projects, did not…

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 a realtor purchased a property in January 2010 using a limited liability company he controlled while also acting as the seller’s agent.   On October 23, 2015, HUD served a complaint on the realtor, alleging…

We audited Saltillo Assisted Living (project), an assisted living facility located in Saltillo, MS, based on a referral from the U.S. Department of Housing and Urban Development’s (HUD) Departmental Enforcement Center and activities included in our 2015 annual audit plan.  Our audit objective was to determine whether the members and operator of Saltillo Assisted Living complied with the executed regulatory agreement and HUD’s requirements…

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 are conducting an audit survey of Saltillo Assisted Living (project) based on a referral from the U.S. Department of Housing and Urban Development’s (HUD) Departmental Enforcement Center and the activities included in our 2015 annual audit plan.  Our survey objective is to determine whether the owners and management agents of Saltillo Assisted Living complied with the executed regulatory agreement and HUD’s requirements.  Our…

The U.S. Department of Housing and Urban Development – Office of Inspector General audited Berkadia Commercial Mortgage, LLC’s underwriting of the loan to fund the renovation of the Temtor project in St. Louis, MO.  We initiated this audit because the project failed quickly after completion, resulting in a large loss to the Federal Housing Administration insurance fund.  Our audit objective was to determine whether Berkadia properly…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General completed an audit of Windridge Apartments in Wichita, Kansas.  We selected Windridge Apartments based on a referral from the Region 7 Office of Multifamily Housing due to high tenant receivables and excessive travel expenses.  Our audit objectives were to determine whether Windridge Apartment Associates, L.P., (1) followed HUD rules and…

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…

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 John Calvin Manor of Lee’s Summit, MO, in response to a request from HUD’s Office of Multifamily Housing in Kansas City, KS. Our audit objective was to determine whether the property violated its regulatory and loan agreement with HUD. The property violated its regulatory and loan agreements with HUD by improperly spending restricted funds,…

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…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audited allegations made against BIONIC Real Estate Services, LLC (BIONIC), a HUD-approved management agent, in a citizen complaint received by our office. The allegations related to BIONIC’s management of Powell Apartments, a HUD Section 236-insured multifamily property with partial project-based Section 8-subsidized units. The objective of our review…

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 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…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audited CitiMortgage, Incorporated (CitiMortgage). Our audit objectives were to determine whether CitiMortgage followed U.S. Department of Housing and Urban Development (HUD) requirements for underwriting loans and performing its quality control program for single-family production. We concluded that CitiMortgage did not properly underwrite 20 of the 60…