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Single Family Loan Programs

Final Action Memorandum: Purchaser of HUD-Insured Single-Family Property Settled Allegations of Causing the Submission of a False Claim

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), reviewed preforeclosure sales under the Federal Housing Administration (FHA) program in the St. Louis, MO, area.  We found that the purchaser of a property being sold in a preforeclosure sale entered into a consulting agreement with the realtor.  The agreement required that when the purchaser later sold the property, he would pay half of the net proceeds from that sale to the realtor’s consulting company.    

Final Civil Action: Wells Fargo Bank, N.A., Settled Allegations of Failing To Comply With HUD’s FHA Underwriting Requirements

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Department of Justice and the U.S. Attorney’s Office, Southern District of New York and Northern District of California, in conducting an investigation of Wells Fargo Bank, N.A.’s origination and underwriting of mortgage loans insured by the Federal Housing Administration (FHA).

Final Civil Action: City First Mortgage Services, LLC, and Van Wagoner Investment Company Settled Allegations of Making False Certifications

Based on a request from the Assistant U.S. Attorney’s Office in Salt Lake City, UT, we provided information about single-family lenders with high default rates. We then reviewed the available case binders for 38 loans for which the Federal Housing Administration (FHA) had paid claims that were underwritten by City First Mortgage Services, LLC. We completed the review and referred alleged violations to the U.S. Department of Housing and Urban Development’s (HUD) Office of Program Enforcement for action under the Program Fraud Civil Remedies Act of 1986.

Final Civil Action: Borrower Settled Alleged Violations of Home Equity Conversion Mortgage Program

We audited the U.S. Department of Housing and Urban Development’s (HUD) oversight of its Home Equity Conversion Mortgage (HECM) program and found that 33 borrowers had more than 1 loan under the program.  Having multiple loans violated program requirements because HUD requires borrowers to reside in the mortgaged residence as their principal residence and borrowers may not have more than one principal residence at a time.  We referred the violations to HUD’s Office of Program Enforcement for action under the Program Fraud Civil Remedies Act.

Sun West Mortgage Company, Cerritos, CA, Did Not Always Meet HUD-FHA Loan Underwriting and Quality Control Requirements

We reviewed Sun West Mortgage Company’s loan underwriting activities, including quality controls, based on a citizen complaint alleging that the mortgage company was deficient in underwriting its loans.  The complaint further alleged that the mortgage company used unauthorized staff in another country and shared user identification numbers to “pre-underwrite” Federal Housing Administration (FHA)-insured loans.  Our objective was to determine whether Sun West followed U.S.

The Georgia Housing and Finance Authority, Atlanta, GA, Did Not Adequately Implement the Federal Housing Administration’s Home Affordable Modification Program in Accordance With HUD’s Requirements

We audited the Georgia Housing and Finance Authority’s implementation of the Federal Housing Administration’s Home Affordable Modification Program (FHA-HAMP).  We selected the Authority because (1) our data analysis showed that the Authority had the highest ratio of FHA-HAMP actions to delinquent loans within the jurisdiction of our regional office, (2) the U.S.

Selene Finance, LP, Houston, TX, Did Not Communicate in a Timely Manner With Delinquent Borrowers

We reviewed Selene Finance, LP’s servicing of its Federal Housing Administration-insured loans and its implementation of the U.S. Department of Housing and Urban Development’s (HUD) Loss Mitigation program.  Our audit objective was to determine whether Selene processed delinquent loans in accordance with HUD’s requirements, especially Loss Mitigation program requirements.

November 30, 2015
Program Area(s): 
While the Department of Housing and Urban Development - Office of Inspector General (HUD OIG) recognizes that there are times when Home Equity Conversion Mortgages (HECM) refinances are beneficial to consumers, HUD OIG is issuing this industry alert to warn lenders, originators, and sponsors that...
August 31, 2015
Program Area(s): 
The US Department of Housing and Urban Development’s Office of Inspector General (HUD OIG) advises the public on how to recognize sovereign citizen occupation of a vacant property and the use of false deeds to support Section 8 leasing. Avoid putting yourself in danger or accepting fraudulent...
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