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 Offices, District of New Jersey, District of Minnesota, and Southern District of Florida, in the civil investigation of PHH Corporation, PHH Mortgage Corporation (PHHMC), and PHH Home Loans, LLC (PHHHL), collectively referred to as PHH.  PHH was a direct endorsement lender…

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 New Jersey, in the civil investigation of Freedom Mortgage Corporation.  Freedom has its principal place of business in Mount Laurel, NJ, and became an FHA-approved direct endorsement lender in 1993.  As a direct endorsement lender, Freedom…

We completed a review of Provident 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 Provident Bank based on an Office of Inspector General risk assessment of single-family lenders. The objective of the audit was to determine whether Provident Bank properly serviced FHA-insured mortgages and…

HUD 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 MetLife Bank, N.A.  MetLife had its principal place of business in Convent Station, NJ.  MetLife became an approved direct endorsement lender under HUD’s Federal Housing Administration (FHA) program on April 5, 2007.  The direct endorsement program authorizes private-sector mortgage…

We audited the Section 8 program administered by Summit Bradford Apartments in Tulsa, OK.  We selected Bradford because we were informed that its management agent may have received Section 8 subsidies for vacant units.  Our objective was to determine whether Summit Bradford Apartments, LP, the owner, and Summit Housing Partners, LLC, the management agent, administered Bradford’s Section 8 program in compliance with its housing…

The civil division of the Western District of Oklahoma U.S. Attorney’s Office settled alleged violations of equity skimming against the owners of Heartland Health Care Center of Bethany. The equity skimming allegations stemmed from our December 2004 audit report outlining the misuse of funds. As a result of the combined efforts of the U.S. Attorney’s office; the U.S. Department of Housing and Urban Development (HUD), Office of Inspector…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited Mortgage Now Inc., a Federal Housing Administration (FHA)-approved nonsupervised direct endorsement lender approved to originate, underwrite, and submit mortgages for insurance. We selected Mortgage Now based on its compare ratio of 223 percent for a 2-year FHA performance period. Its average compare ratio for the loans originated in our…

Based on a request by the U.S. Department of Housing and Urban Development’s (HUD) multifamily housing Kansas City hub office, we started an audit of three related nursing facilities on August 2008: • Bartlesville Health Care Center, Inc., doing business as Silver Lake Care Center; • Mannford Health Care Center, Inc., doing business as Cimarron Pointe Care Center; and • Owasso Nursing Center, Inc., doing business as…

We audited Mortgage Lending Direct, Inc. (MLD), a nonsupervised lender (see footnote -1)located in Florham Park, NJ, in support of the U.S. Department of Housing and Urban Development (HUD), Office of the Inspector General’s (OIG) goal of improving the integrity of the single-family insurance program. We selected MLD for audit because its 8.88 percent default rate for Federal Housing Administration (FHA)-insured single-family loans with…

We performed a limited review of Midland Mortgage Company (Midland) as a result of our internal audit of the Federal Housing Administration (FHA) – Home Affordable Modification Program (HAMP). Our objective was to determine whether Midland followed U. S. Department of Housing and Urban Development (HUD) rules and regulations when processing defaulted loans for the FHA-HAMP loss mitigation option. Overall, Midland complied with FHA-HAMP rules…

We conducted a review of Federal Housing Administration (FHA) loans underwritten by Security Atlantic Mortgage Company, Inc. (Security Atlantic), an FHA direct endorsement lender. This review was conducted as part of the Office of Inspector General’s (OIG) Operation Watchdog initiative to review the underwriting of 15 direct endorsement lenders at the suggestion of the FHA Commissioner. The Commissioner expressed concern regarding the…

We audited Infinity Home Mortgage Company, Inc. (Infinity Home Mortgage), a nonsupervised lender approved to originate Federal Housing Administration (FHA) single-family mortgage loans. We selected Infinity Home Mortgage because its default rate for the State of Pennsylvania was significantly higher than the average default rate for the State. Our objective was to determine whether Infinity Home Mortgage complied with U.S. Department of Housing…

We completed an audit of Ark Mortgage, Incorporated (Ark Mortgage), a nonsupervised direct endorsement lender located in North Brunswick, New Jersey. The audit objectives were to determine whether Ark Mortgage officials (1) originated insured loans in accordance with U.S. Department of Housing and Urban Development/Federal Housing Administration (HUD/FHA) requirements and (2) developed and implemented a quality control plan that complied with…

We completed an audit of Jersey Mortgage Company (Jersey Mortgage), a nonsupervised lender located in Cranford, New Jersey. The audit objectives were to determine whether Jersey Mortgage (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, which include adherence to prudent lending practices, and (2) developed and implemented a…

In response to requests from the U. S. Department of Housing and Urban Development (HUD) and Senator James Inhofe, we audited the property owner's application and the loan processing and underwriting of the HUD-insured mortgage loan to Greystone Apartments, Inc., for Cypress Ridge Apartments. Harry Mortgage Company, the lender, processed and recommended loan approval under the multifamily accelerated processing (MAP) program. The audit…

We audited the City of Camden's (City) asset control area (ACA) program following a request from the U.S. Department of Housing and Urban Development's (HUD) Office of Single Family Asset Management for a review of the City's compliance with its ACA agreement with HUD. Our objective was to determine whether the City complied with specific requirements in the ACA agreement pertaining to the resale of properties it acquired from HUD…

We completed an audit of Mortgage Access Corporation, doing business as Weichert Financial Services, a nonsupervised lender located in Morris Plains, New Jersey. The audit objectives were to determine whether Mortgage Access Corporation (1) approved insured loans in accordance with U.S. Department of Housing and Urban Development (HUD)/Federal Housing Administration (FHA) requirements, and (2) developed and implemented a quality control plan…

Defendants Allegedly Engaged in a Scheme to Purchase Real Estate at Fraudulently Depressed Short Sale Prices Resulting in Millions of Dollars in False Claims Submitted to HUD’s FHA Mortgage Insurance Program The United States has filed a civil complaint in federal court in Brooklyn seeking damages and penalties against three individuals and multiple companies alleged to have engaged in a wide-ranging mortgage fraud scheme to defraud the…

NEWARK, N.J. – A Hudson County, New Jersey, woman was arrested today for allegedly embezzling hundreds of thousands of dollars from a non-profit corporation dedicated to providing affordable housing to residents of Englewood, New Jersey, U.S. Attorney Craig Carpenito announced. Yezenia Castillo, 44, of Hoboken, New Jersey, is charged by complaint with four counts of wire fraud. She is scheduled to appear this afternoon before U.S. Magistrate…