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Hotline

Crime, Fraud, Waste, and Abuse
July 01, 2014
2014-KC-0002
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The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited HUD’s Credit Alert Verification Reporting System (CAIVRS) to determine whether the default and claims data in CAIVRS agreed with the data in the Federal Housing Administration’s (FHA) default and claims systems. We found that HUD’s CAIVRS did not contain information on all borrowers’ default, foreclosure, and claim activity.  It would incorrectly return accept codes for more than 260,000 borrowers who had been in default, foreclosure, or claim within the past 3 years. In addition, CAIVRS did not contain information for FHA borrowers with claims older than 3 years. Therefore, HUD did not provide other Federal agencies with sufficient information on FHA borrowers with delinquent Federal debt to meet the requirements of the Debt Collection Improvement Act, which bars delinquent Federal debtors from obtaining additional Federal loans or loan guarantees until such delinquency is resolved. We recommend that HUD document the selection rules used for feeding data to CAIVRS, update the rules to provide for complete reporting of all ineligible borrowers, and develop system error checks to identify potential issues. We also recommend that HUD report FHA borrowers with delinquent Federal debt beyond the 3-year claim period or obtain an exemption from the Secretary of the Treasury to exempt these loans after 3 years.  

Recommendations

Housing

  •  
    Status
      Open
      Closed
    2014-KC-0002-001-B
    $9,501,619.00
    Funds Put to Better Use

    Recommendations that funds be put to better use estimate funds that could be used more efficiently. For example, recommendations that funds be put to better use could result in reductions in spending, deobligation of funds, or avoidance of unnecessary spending.

    Priority
    Priority

    We believe these open recommendations, if implemented, will have the greatest impact on helping HUD achieve its mission to create strong, sustainable, inclusive communities and quality affordable homes for all.

    Closed on March 31, 2026

    Update selection rules for CAIVRS to provide for complete reporting of all ineligible borrowers to put $9.5 million to better use.

    Corrective Action Taken

    The Office of Single-Family Housing closed this recommendation based on it updating the data feed sent from its Single-Family Insurance System - Claims Subsystem (A43C) to CAIVRS to include all deficiency judgement data for all parties until resolved.  HUD provided the Interface Control Document showing what data is sent to CAIVRS related to deficiency judgments.  By taking these steps, HUD helped ensure complete reporting of all ineligible borrowers which should put $9.5 million to better use.