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Develop and implement written policies and procedures (1) for locating homeowners who have unpaid refunds (for both existing and new refunds), (2) to establish a standard timeframe for mailing refund applications to homeowners after they are requested, and (3) to establish requirements for verifying the termination date based on supporting documents provided by homeowners.

Publication Report

2022-LA-0001 | January 07, 2022

HUD Did Not Have Adequate Controls in Place to Track, Monitor, and Issue FHA Refunds Owed to Homeowners

We audited the U.S. Department of Housing and Urban Development’s (HUD) oversight of Federal Housing Administration (FHA) refunds based on a hotline complaint alleging that HUD was trying to make it difficult for claimants to obtain refunds or discourage… more

Related Recommendations

Housing

  • Closed on June 27, 2023

    Develop and implement written policies and procedures and controls for the FHA refund process to address the deficiencies identified in the audit report. These should include (1) controls to ensure that the website for the public listing of all unpaid refunds is complete, (2) controls to ensure that refund applications are sent only to the homeowners who requested them, (3) controls to ensure that refund applications are sent to all homeowners on the loan after loan termination, and (4) a formal monitoring framework for tracking the status of refunds.

  • Research, develop, and implement policies and procedures to reduce the number of refunds that have remained unclaimed for an extended period, including consideration of a statute of limitations.

  • Develop and implement written policies and procedures regarding the designation of legal representation for applicants.

  • Closed on June 12, 2024

    Obtain the required approvals under the Paperwork Reduction Act for the insert document mailed with the refund application and the Tracer Found Case form.