The U.S. Department of Housing and Urban Development, Office of Inspector General is conducting an audit of the Wyoming Housing Opportunities Association. We are auditing the Wyoming Housing Opportunities Association based on information obtained during our audit of the Wyoming Community Development Authority that 51 Federal Housing Administration (FHA) mortgages by this same borrower had defaulted. The audit objective is to determine whether Wyoming Housing developed, originated, and managed the 51 units of Village Creek in accordance with Federal regulations.
The purpose of this memorandum is to provide time-sensitive information to HUD regarding the pending foreclosures of the 51 Village Creek townhomes. We found that the Wyoming Housing board of directors voted to default on the Village Creek mortgages. Further, Wyoming Housing did not implement a binding home ownership agreement with its tenants and failed to market or attempt to sell the 51 individual Village Creek townhomes in accordance with the terms of the original agreement documents. We recommended that HUD develop and implement a plan to resolve the current situation with the least amount of negative impact on the insurance fund. The plan should include any possible options to offer the current tenants the option to purchase their townhome at the remaining principal balance in accordance with the Village Creek home ownership agreement and the original documents presented to HUD during underwriting. We also recommended that HUD assess administrative sanctions against Wyoming Housing Opportunities Association for failing to establish the home ownership conversion plan and subsequent default of Village Creek Townhomes.