The City of Chicago’s Department of Public Health, Chicago, IL, Did Not Administer Its Lead Hazard Reduction Demonstration Grant Program in Accordance With HUD’s and Its Own Requirements
We audited the City of Chicago’s Department of Public Health’s (Department) Lead Hazard Reduction Demonstration Grant Program based on our analysis of the U.S. Department of Housing and Urban Development’s (HUD) Office of Lead Hazard Control and Healthy Homes grantees in Region 5’s jurisdiction. Our audit objective was to determine whether the Department administered the Program in accordance with HUD’s and its own requirements.
The...
Septiembre 30, 2018
Report
#2018-CH-1010
HUD Failed To Enforce the Terms of a Settlement Agreement With Fifth Third Bank Because It Did Not Record Indemnified Loans in Its Tracking System
The U.S. Department of Housing and Urban Development (HUD) Office of Inspector General (OIG) worked with HUD’s Office of Lender Activities and Program Compliance, Office of Single Family Housing, to resolve outstanding matters related to two September 2015 agreements with Fifth Third Bank (FTB) and its principal subsidiary, Fifth Third Bancorp, an Ohio-based bank holding company. HUD failed to properly record required indemnifications in...
Septiembre 28, 2018
Memorandum
#2018-CF-0802
The Owner and Management Agent for Rainbow Terrace Apartments, Cleveland, OH, Did Not Always Operate the Project in Accordance With the Regulatory Agreement and HUD’s Requirements
We audited Rainbow Terrace Apartments based on our analysis of risk factors related to multifamily projects in Region 5’s jurisdiction and the activities included in our fiscal year 2018 annual audit plan. Our objective was to determine whether the project’s owner and management agent operated the project in accordance with the regulatory agreement and the U.S. Department of Housing and Urban Development’s (HUD) requirements.
The project...
Septiembre 28, 2018
Report
#2018-CH-1009
The Lender Generally Underwrote the Second and Delaware Project Loan in Accordance With HUD Rules and Regulations
The U.S. Department of Housing and Urban Development, Office of Inspector General, audited the lender, Berkeley Point Capital, and the underwriting for the Second and Delaware project loan. We initiated the review of the loan underwriting based on a previous review of the Second and Delaware project, which focused on the construction and development of the project. The almost $46 million project is Federal Housing Administration (...
Septiembre 27, 2018
Report
#2018-KC-1003
HUD Paid an Estimated $413 Million for Unnecessary Preforeclosure Claim Interest and Other Costs Due to Lender Servicing Delays
We audited the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration’s (FHA) preforeclosure sale claim process based on an internal Office of Inspector General audit suggestion noting that existing regulations may allow excessive preforeclosure claim interest costs. Our audit objective was to determine the amount of unnecessary preforeclosure claim interest and other costs that resulted from lender...
Septiembre 27, 2018
Report
#2018-LA-0007
HUD Did Not Adequately Administer Its Housing Counseling Program
We performed a review of the U.S. Department of Housing and Urban Development’s (HUD) Housing Counseling Program, located within the Office of Housing Counseling. We selected this program based on an audit suggestion that was included in our annual audit plan to help address HUD’s strategic goal to strengthen the housing market to bolster the economy and protect consumers. Our objective was to determine whether HUD adequately...
Septiembre 24, 2018
Report
#2018-NY-0001
HUD Did Not Have Adequate Controls To Ensure That Partial Claim Notes for FHA Loans Were Properly Tracked for Future Collection
We audited the U.S. Department of Housing and Urban Development’s (HUD) tracking of partial claim notes. The audit was initiated in response to an Office of Inspector General preaudit analysis of HUD’s Single Family Data Warehouse (SFDW) data, which determined that partial claim notes may not have been properly tracked in HUD’s Single Family Mortgage Asset Recovery Technology (SMART) system (see Scope & Methodology section for...
Septiembre 21, 2018
Report
#2018-LA-0005
The Owner of Luther Towers II, Wilmington, DE, Did Not Manage Its HUD-Insured Project in Accordance With Its Regulatory Agreement and HUD Requirements
We audited Luther Towers II because it was a high-risk multifamily project that received low inspection and financial assessment scores on our multifamily risk assessment for projects within our region and we had never audited it. Our audit objective was to determine whether the owner managed the project in accordance with its regulatory agreement and U.S. Department of Housing and Urban Development (HUD) requirements.
The owner of Luther...
Septiembre 21, 2018
Report
#2018-PH-1006
HUD Did Not Always Identify and Collect Partial Claims Out of Surplus Proceeds From Nonconveyance Foreclosures
The U.S. Department of Housing Urban Development (HUD), Office of Inspector General audited HUD to determine whether it identified and collected outstanding partial claims out of surplus proceeds from nonconveyance foreclosures. We initiated this audit because we learned while doing unrelated audit work that a trustee attorney held surplus proceeds from two nonconveyance foreclosures and HUD had not claimed these funds to offset earlier...
Septiembre 20, 2018
Report
#2018-KC-0004
Towne Mortgage Company, Troy, MI, Generally Implemented Its Loss Mitigation Program in Accordance With HUD’s Requirements
We audited Towne Mortgage Company, a Federal Housing Administration (FHA) nonsupervised lender, as part of the activities in our fiscal year 2018 annual audit plan. We selected Towne Mortgage based on our analysis of risk factors for single-family servicing lenders in Region 5’s jurisdiction.[1] Our audit objective was to determine whether Towne Mortgage properly implemented its Loss Mitigation program for FHA-insured loans in...
Septiembre 18, 2018
Report
#2018-CH-1005
HUD’s Office of Residential Care Facilities Did Not Always Have and Use Financial Information to Adequately Assess and Monitor Nursing Homes
We audited the U.S. Department of Housing and Urban Development’s (HUD) monitoring of the financial performance of Section 232 nursing homes based on the size of their program, the inherent risks in the program, the length of time since our last audit, and the inclusion of this review in the annual audit plan. Our audit objective was to determine whether HUD had sufficient financial information and used this information to adequately...
Septiembre 17, 2018
Report
#2018-BO-0001
HUD’s DASP Note Sales Generally Resulted in Lower Loss Rates Than Conveyance Claims
The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General audited HUD’s single-family note sales program. This is the third in a series of audits on the note sales program. The first audit, 2017-KC-0006, reported that HUD did not conduct rulemaking or develop formal procedures for its single-family note sales program. The second audit, 2017-KC-0010, reported that HUD generally ensured that...
Septiembre 06, 2018
Report
#2018-KC-0003
Meeker Housing Authority, Meeker, CO, Improperly Used Project Operating Funds for Its 221(d)(3) Multifamily Housing Insurance Program
The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General audited the Meeker Family and Elderly Housing project based on a referral from HUD’s Office of Multifamily Housing Programs in Denver, CO. The project is owned and managed by the Meeker Housing Authority. HUD alleged that the owner had failed to file audited financial statements or make mortgage payments to HUD for the past 10 years. Our...
Septiembre 06, 2018
Report
#2018-DE-1001
Louis Manor Apartments, Port Arthur, TX, Multifamily Section 8 Program, Subsidized Unsupported Tenants and Uninspected Units
We audited the multifamily Section 8 Project-Based Rental Assistance (PBRA) program at the Louis Manor Apartments. We selected Louis Manor in accordance with our goal to review the U.S. Department of Housing and Urban Development’s (HUD) multifamily housing programs and because our analysis of Tenant Rental Assistance Certification System data showed red flag indicators at Louis Manor that appeared to be similar to the conditions we found...
Agosto 31, 2018
Report
#2018-FW-1006
Final Civil Action: Deloitte & Touché, LLP, Settled Allegations That It Failed To Conduct Taylor, Bean & Whitaker Mortgage Corporation’s Audits in Conformance With Generally Accepted Auditing Standards
On February 28, 2018, Deloitte entered into a settlement agreement with the Federal Government, agreeing to pay $149.5 million, of which $115 million was restitution. Deloitte settled allegations for alleged conduct in connection with its role as the independent outside auditor of TBW for TBW’s fiscal years that ended April 30, 2002, through April 30, 2008. The settlement agreement was neither an admission of liability by Deloitte...
Agosto 27, 2018
Memorandum
#2018-FO-1802
HUD’s Office of Healthcare Programs Generally Approved Section 232 FHA-Insured Loans in Accordance With HUD Requirements
We audited the U.S. Department of Housing and Urban Development’s (HUD) approval of Section 232 Federal Housing Administration (FHA)-insured loans based on our initiative to focus HUD management’s attention on problems areas with the Section 232 program. Our audit objective was to determine whether HUD approved Section 232 FHA-insured loans for projects that qualified for mortgage insurance in accordance with HUD requirements.
HUD...
Agosto 10, 2018
Report
#2018-PH-0001
Eastwood Terrace Apartments, Nacogdoches, TX, Multifamily Section 8, Subsidized Questionable Tenants, Overhoused Tenants and Uninspected Units
We audited the Eastwood Terrace Apartments multifamily Section 8 Project-Based Rental Assistance (PBRA) program. We selected Eastwood Terrace in accordance with the Office of Inspector General’s (OIG) goal to review HUD’s multifamily housing programs and because the OIG Office of Investigation conducted an investigation and suggested that the complex might not have had appropriate controls to ensure tenant eligibility. Our objective...
Agosto 02, 2018
Report
#2018-FW-1005
The Pinellas County Housing Authority, Largo, FL, Generally Administered Its Rental Assistance Demonstration Conversion but Did Not Fully Comply With HUD’s Rent Reasonableness Determinations After Conversion
We audited the Pinellas County Housing Authority’s Rental Assistance Demonstration Program (RAD) conversion to the Section 8 Project-Based Voucher program and compliance after the conversion. We selected the Authority for review in keeping with the goals of our annual audit plan. Our objective was to determine whether the Authority administered its RAD conversion in compliance with U.S. Department of Housing and Urban Development (...
Julio 13, 2018
Report
#2018-AT-1007
Mortgagee Review Board Administrative Actions
The MRB rules on cases against FHA-approved lenders in which there is evidence of serious violations relating to loan origination, servicing activity, and failure to comply with FHA operational guidelines. When the MRB learns that a lender may not be in compliance with FHA requirements, it may take administrative actions to resolve problems with lenders. It does not consider “loss to the government” in these actions. Administrative actions may...
Julio 03, 2018
Report
#2017-OE-0005
The Middlesex Health Care Center, Middletown, CT, Was Not Always Operated According to Its Regulatory Agreement and HUD Requirements
We audited the Federal Housing Administration-insured nursing home, Middlesex Health Care Center in Middletown, CT, because we identified profitability and solvency issues during ongoing work with the Section 232 program. Additionally, the U.S. Department of Housing and Urban Development (HUD) identified the project as potentially troubled as of November 2017. Our audit objective was to determine whether the project was operated...
Junio 29, 2018
Report
#2018-BO-1004