Develop and implement standard operating procedures for recording and periodically evaluating sustained audit receivables to ensure that (1) all receivables are supported by a claim to cash and (2) an allowance for loss is recorded that reasonably estimates uncollectible amounts to reduce the Read More

Implement adequate procedures and controls to ensure that it properly monitors the listing brokers to ensure compliance with its contract. The procedures and controls should include but not limited to performing quality control reviews and supervisory review of its brokers, and maintaining Read More

Update its quality control plan to include the performance of physical inspections of the properties in its inventory.

Develop a control to detect loans that did not maintain the required flood insurance to put $1.5 billion to better use by avoiding potential future costs to the FHA insurance fund from inadequately insured properties. Corrective Action Taken In November 2022, FHA published the Read More

Consult with the Office of General Counsel to review the language in the statutes, regulations, and handbooks and if warranted, make adjustments to the HECM handbook to ensure consistency with the statute and regulation.

Require lenders to provide evidence of sufficient flood insurance or execute indemnification agreements for the 21 loans in our statistical sample that did not have sufficient flood insurance at the time of our audit to put nearly $1.1 million to better use. (See appendix A.)

Consult with the Office of General Counsel to review the language in the statutes, regulations, and handbooks and if warranted, make adjustments to the forward mortgage handbook to ensure consistency with the statute.

Work with grant program offices to overcome reporting challenges. Ensure that grant program offices report OMB-requested data. Learn from and leverage results of participating grant programs.

Work with PD&R on an evaluation approach and design for the Promise Zone initiative. Ensure that OFPM has the appropriate resources for its new Communications and Data Analysis Division.

Complete all steps necessary for an effective evaluation effort.

Develop alternative policies and procedures that would enable the use of the final single-family LLG cash flow model results and HECM return on notes cash flow model results in the final ROA models.

Correct the error related to the allocation of the liquidating reestimates in fiscal years 2017 and 2018.

Revise the modeling policies and procedures to use the established HECM loan limits in the HECM LLG cash flow model.

Reassess the model design that was implemented to avoid the double counting of the cash flows for HECM mortgages in the LLG cash flow and ROA models and perform the following: (1) determine whether there are alternative methodologies that will not result in the exclusion of cash flows in both Read More

Develop and implement a reconciliation process to ensure that the information in various systems is consistent for all accounting events.

Ensure that the $270.7 million identified as invalid obligations in fiscal year 2017 is deobligated as appropriate.

Restate the fiscal year 2017 financial statements to correct the impact of using the improper discounting methodology in the HECM ROA model in fiscal year 2017.

Develop and implement policies, procedures, and controls to ensure that he obligation is recognized when the loan guarantee commitment or the direct loan obligation is made and the subsidy cost expense is recognized when the loan is endorsed for loan guarantees and when the loan is disbursed for Read More

Implement an automated subsidiary ledger system with the capability of obtaining loan-level transaction data from FHA, Treasury, and FFB source systems.

Reassess the HECM assumption that mortgages with an unpaid principal balance greater than the maximum claim amount will not be assigned to HUD and perform the following: (1) compare this assumption to historical experience, (2) document the basis for selecting the assumption as opposed to Read More