We audited The Lending Company, Inc., based on a hotline complaint, previous U.S. Department of Housing and Urban Development (HUD) reviews, and our goal to improve the integrity of the Federal Housing Administration (FHA) single-family insurance programs.  Our objectives were to determine whether The Lending Company complied with HUD requirements when it used gift programs, originated and underwrote FHA loans, and implemented its quality…

We completed the 17th audit report in our ongoing review of the Lower Manhattan Development Corporation’s (LMDC) administration of the $2.783 billion in Community Development Block Grant (CDBG) Disaster Recovery Assistance funds awarded to the State of New York in the aftermath of the September 11, 2011, terrorist attacks on the World Trade Center in New York City.  During the audit period, April 1, 2011 through March 31, 2012, LMDC…

We reviewed alleged violations of U.S. Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG) requirements.  The alleged violations related to fraudulent expense reimbursements sought and received by a contractor from CDBG funds.  The Department of Justice filed a complaint under the False Claims Act and in February 2013 reached a settlement with the subject.  The subject acknowledged and…

We completed a review of Nassau County, NY Office of Community Development’s administration of its HOME Investment Partnerships Program. We selected this auditee based on a risk assessment conducted by the U.S. Department of Housing and Urban Development’s (HUD) New York City Office of Community Planning and Development. The objectives of the audit were to determine whether the County committed and obligated HOME funds in a timely…

We audited the City of Albany, NY’s administration of its supplemental Community Development Block Grant program funded under the American Recovery and Reinvestment Act of 2009 (CDBG-R). The objectives were to determine whether the City administered its CDBG-R program effectively, efficiently, and economically in accordance with applicable rules and regulations, including the Recovery Act, and other U.S. Department of Housing and Urban…

We completed a review of Deutsche Bank’s Job Creation and Retention Program (JCRP) grant. We selected this auditee based on a hotline complaint, case number HL-2012-0199, that was referred from the United States Government Accountability, FraudNet control number 58392, received on November 23, 2011. The complaint alleged that Deutsche Bank officials fraudulently received a $34.5 million JCRP grant under the guise that they would maintain 5,500…

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…

We completed a review of the Village of Spring Valley, NY, a subrecipient of Rockland County, NY. We selected this auditee based on a hotline complaint that was referred from the Federal Housing Finance Agency (FHFA) OIG, Complaint Number Z-12-0445-1, received on February 14, 2012. The complaint alleged that the Village (1) used eminent domain and Federal funds to seize property, (2) transferred ownership of properties to a developer to be…

We completed a corrective action verification of the recommendations made to the U.S. Department of Housing and Urban Development’s (HUD) Office of Community Planning and Development (CPD) pertaining to our review of The City of Newburgh, NY’s Section 108 Loan Guarantee program, Audit Report 2009-NY-1001, which was issued November 7, 2008. The purpose of the corrective action verification was to determine whether the audit recommendations…

We audited the Buffalo Municipal Housing Authority’s Public Housing Capital Fund Stimulus (Formula) program funded under the Recovery and Reinvestment Act of 2009 based on an Office of Inspector General risk analysis and the amount of funding the Authority received. The objectives of the audit were to determine whether Authority officials (1) procured contracts in accordance with U.S. Department of Housing and Urban Development (HUD)…

We completed the 16th audit report in our ongoing review of the Lower Manhattan Development Corporation’s administration of the $2.783 billion in Community Development Block Grant (CDBG) Disaster Recovery Assistance funds awarded to the State of New York in the aftermath of the September 11, 2011, terrorist attacks on the World Trade Center in New York City. During the audit period, April 1, 2010 through March 31, 2011, LMDC disbursed…

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 completed a review of the City of Phoenix’s (City) Neighborhood Stabilization Program (NSP) grants NSP1 and NSP2. We performed the review because it supports the U.S. Department of Housing and Urban Development (HUD), Office of Inspector General’s strategic plan to contribute to the oversight objectives of the American Recovery and Reinvestment Act of 2009 and the City received a $60 million grant as one of 56 NSP2 grantees. Our objective…

We completed a review of the New York City Housing Authority’s use of Federal funds. We selected this auditee based on a hotline complaint, case number HL-2011-0705, which alleged a pattern of waste, overspending, and abuse by the Authority. Specifically, the complaint alleged that the Authority (1) froze its Section 8 vouchers due to lack of available funds, (2) overpaid at least one housing manager with an annual salary of $187,000, (3) paid…

We audited the City of Syracuse, NY, pertaining to its Economic Development Initiative (EDI)-Special Project grants. The audit objective was to determine whether City officials were administering EDI Special Project grants effectively, efficiently, and economically in accordance with applicable rules and regulations. Specifically, we wanted to determine whether City officials expended EDI funds for eligible activities that were fully supported…

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 the City of Buffalo, NY (City) pertaining to its administration of its supplemental Community Development Block Grant (CDBG) program funded under the American Recovery and Reinvestment Act of 2009. We selected the City based on concerns identified in our completed audit of the City’s CDBG program, Audit Report Number 2011-NY-1010 issued April 15, 2011. Our audit objectives were to determine whether the City…

We audited Housing Our Communities’ (subrecipient) Neighborhood Stabilization Program (NSP1) subgrant from the City of Avondale. The audit was started primarily because the U.S. Department of Housing and Urban Development, Office of Inspector General’s (HUD OIG) audit plan includes objectives to review Housing and Economic Recovery Act grantees and because a previous HUD OIG audit of the City of Mesa found indications that the subrecipient did…

We audited the operations of the City of Syracuse, NY, pertaining to its Community Development Block Grant (CDBG) program. The objectives of the audit were to determine whether the City administered its CDBG program effectively, efficiently, and economically in accordance with applicable rules and regulations. Specifically, we wanted to determine whether City officials had (1) established and implemented the necessary controls to ensure that…