We audited New Image Emergency Shelter’s Housing Opportunities for Persons With AIDS (HOPWA) program based on a referral from the U.S. Department of Housing and Urban Development, Office of Inspector General’s (HUD OIG) Office of Investigation and a citizen complaint, alleging that New Image lacked adequate documentation to support program expenditures and employee salaries. Our objective was to determine whether New Image administered and…

We audited the City of Chicago’s HOME Investment Partnerships Program.  We selected the City’s Program based upon our analysis of risk factors related to Program grantees in Region 5’s jurisdiction.  Our objectives were to determine whether the City complied with HUD’s requirements regarding (1) leases between rental new construction projects’ owners and households, (2) use and reporting of Program income, and (3) monitoring of…

We initiated a review of the City of Los Angeles’ Community Development Block Grant (CDBG) program due to concerns that CDBG-funded assets may be at risk.  We performed our review to address questionable costs identified during a prior Office of Inspector General review (audit report 2014-LA-0001).  Our objective was to determine whether the City maintained the required documentation for its CDBG-funded projects to support its vested…

We audited the City of Pomona’s Neighborhood Stabilization Programs (NSP1 and NSP3).  We initiated the audit because of a hotline complaint with concerns regarding the administration of program funds.  Our objective was to determine whether the City administered its NSP funds in accordance with applicable U.S. Department of Housing and Urban Development (HUD) rules and requirements.  Specifically, we wanted to determine whether…

We assisted the U.S. Attorney’s Office of the Northern District of California in the civil investigation of Reunion Mortgage, Inc. (Reunion).  Reunion is a former Federal Housing Administration (FHA)-approved mortgage lender, with its principal place of business located in Milpitas, CA.  Based in large part on our review of loans underwritten by Reunion between December 2007 through October 2009, the U.S. Attorney’s Office filed a…

We conducted a civil fraud review of an alleged loan origination fraud scheme involving a loan officer that assisted a borrower to purchase a home under the U.S. Department of Housing and Urban Development (HUD), Federal Housing Administration (FHA) program.  The alleged scheme involved submitting a false loan application and other documentation to obtain an FHA-insured loan on a home in Brentwood, CA.  Based in part on OIG’s review,…

We audited the City of Richmond’s Neighborhood Stabilization Program 1 (NSP1) in response to HUD Office of Community Planning and Development’s concerns over the City’s management of its NSP1.  Our objective was to determine whether the City administered its NSP1 in accordance with requirements related to procurement and cost eligibility. The City did not administer its NSP1 in accordance with requirements related to procurement and cost…

We reviewed an alleged loan origination fraud scheme involving a borrower purchasing a home in which the loan was insured under the U.S. Department of Housing and Urban Development (HUD), Federal Housing Administration (FHA) program.  The alleged scheme involved submitting a false loan application to obtain an FHA-insured loan on a home in Brentwood, CA.  Based in part on our review, HUD filed a complaint against the borrower under…

We audited the Moline Housing Authority’s Section 8 program as part of the activities in our fiscal year 2013 annual audit plan.  We selected the Authority based on a citizen’s complaint to our office.  Our objective was to determine whether the Authority administered its program in accordance with the U.S. Department of Housing and Urban Development’s (HUD) and its own requirements. The Authority did not always comply with HUD’s…

We reviewed the developer fees the County of San Bernardino paid to its Neighborhood Stabilization Program (NSP) developers.  Our objective was to determine whether the County adequately ensured that NSP developer fees paid to its developers met HUD requirements.  We performed our review to address questionable costs identified during a prior Office of Inspector General (OIG) review (audit report 2014-LA-0002).  During that…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), conducted a limited review of HUD’s oversight of loans underwritten by HUD-approved Federal Housing Administration (FHA) lenders.  We conducted the internal review as part of OIG’s annual audit plan, prompted by four recent OIG external lender audits reporting that the lenders allowed prohibited restrictive covenant agreements.  The…

We initiated a review of the City of Hawthorne’s Community Development Block Grant (CDBG) and CDBG-Recovery Act (CDBG-R) program, based on a request by the U.S. Department of Housing and Urban Development’s (HUD) Los Angeles Office of Community Planning and Development.  Our objective was to determine whether the City adequately supported its salary and program administrative cost allocations to the CDBG and CDBG-R programs in accordance…

We audited the City of Hawthorne because of a corrective action verification audit done by the Office of Inspector General (OIG) that identified $840,741 in HOME Investment Partnerships Program funds that were transferred to the Section 8 program between 2005 and 2006 (2013-LA-0802).  The objectives of the audit were to determine (1) the eligibility of $840,741 in 2005 and 2006 HOME program transfers to the Section 8 program, (2) whether…

We investigated an alleged preforeclosure scheme involving 31 properties financed with Federal Housing Administration (FHA)-insured loans.  As a result, the U.S. Attorney’s Office of the Central District of California brought a civil case against Mr. Mario Menendez under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). In August 2011, the U.S. Attorney’s Office filed a complaint in U.S. district court…

We reviewed the County of Santa Barbara’s HOME Investment Partnerships program due to concerns expressed by the U.S. Department of Housing and Urban Development’s (HUD) Los Angeles Office of Community Planning and Development regarding the County’s administration of its HOME program.  Our objective was to determine whether the County performed its monitoring responsibilities and ensured that incurred HOME program expenditures were eligible…

We audited the City of Santa Ana’s Neighborhood Stabilization Program 2 (NSP2).  We initiated the audit as part of the U.S. Department of Housing and Urban Development (HUD), Office of Inspector General’s (OIG) fiscal year 2012-2013 annual audit plan.  Our objective was to determine whether the City administered its program funds in accordance with applicable HUD rules and requirements.  Specifically, our focus was to determine…

We reviewed the City of San Bernardino’s Community Development Block Grant (CDBG) and CDBG-Recovery Act (CDBG-R) programs because the U.S. Department of Housing and Urban Development’s (HUD) Los Angeles Office of Community Planning and Development expressed concerns about the City’s administration of its CDBG program. Our objective was to determine whether the City administered its CDBG and CDBG-R program funds in accordance with applicable HUD…

We audited Bay Vista Methodist Heights, San Diego, CA, to determine the full extent of the misuse of its trust funds. We selected Bay Vista for review based on a referral from the Office of Multifamily Housing, stating that Bay Vista violated its trust fund agreement with the U.S. Department of Housing and Urban Development (HUD) because the former chief financial officer transferred more than $3 million in restricted funds into Bay Vista’s…

We completed a corrective action verification of a recommendation made to the U.S. Department of Housing and Urban Development’s (HUD) Office of Public and Indian Housing (PIH) pertaining to our review of the City of Hawthorne, CA’s Section 8 program, Audit Report 2011-LA-1008, which was issued March 28, 2011. The purpose of the corrective action verification was to determine whether HUD officials appropriately closed audit recommendation 1A.…

We conducted a limited review of Federal Housing Administration (FHA) loans underwritten by Standard Pacific Mortgage, Inc. We selected the lender based on the results of an auditability survey, which determined that Standard Pacific Mortgage allowed prohibited restrictive covenants to be filed against FHA-insured properties. The objective of our review was to determine the extent to which Standard Pacific Mortgage failed to prevent the…