We audited the U.S. Department of Housing and Urban Development’s (HUD) Office of Multifamily Housing Programs’ monitoring of civil rights compliance.  Robust monitoring for civil rights compliance is critical to HUD’s goals to support underserved communities.  Our audit objective was to assess the extent to which HUD monitored civil rights compliance in its program activities.HUD and performance-based contract administrators (PBCA)…

We audited the U.S. Department of Housing and Urban Development (HUD), Office of Multifamily Housing Programs’ efforts to address multifamily mortgage application processing delays.  When applications for these loans are delayed, it slows the production and availability of affordable multifamily housing units.  During the COVID-19 pandemic, HUD took action to eliminate a backlog of over 500 applications waiting to be assigned to…

We audited the Federal Housing Administration (FHA), Office of Asset Sales’ U.S. Department of Housing and Urban Development (HUD)-Held Vacant Loan Sales (HVLS) program.  The audit objective was to assess the extent to which HUD achieved its mission objectives for a 2022 vacant loan sale.  We noted deficiencies in 52 of 53 HUD-approved applications within the reviewed vacant loan sale.  These deficiencies occurred in transactions…

We audited the U.S. Department of Housing and Urban Development (HUD), Office of Single Family Housing’s Federal Housing Administration (FHA) Resource Center’s handling of housing discrimination inquiries.  We initiated the audit to assist HUD with ensuring that the FHA Resource Center (1) provided accurate and complete information on potential housing discrimination to its customers and (2) ensured that instances of potential housing…

Develop a control to detect loans that did not maintain the required flood insurance to put $1.5 billion to better use by avoiding potential future costs to the FHA insurance fund from inadequately insured properties. Corrective Action Taken In November 2022, FHA published the Acceptance of Private Flood Insurance for FHA-Insured Mortgages final rule (Docket No. FR-6084-F-02) in the Federal Register and issued Mortgagee Letter 2022-18,…

In June 2020, we received letters from members of Congress, including the chairpersons of the House Committee on Financial Services and Oversight and Investigation Subcommittee, expressing concern that the U.S. Department of Housing and Urban Development (HUD) imposed a new, nonpublic, and legally erroneous policy that prohibited issuing Federal Housing Administration (FHA)-insured loans to Deferred Action for Childhood Arrivals (DACA)…

The West Calumet Housing Complex (WCHC), located in East Chicago, IN, was a public housing development that opened in 1972 on top of a former lead smelting plant.  HUD and other agencies missed multiple opportunities to identify site contamination at WCHC.  As a result, WCHC residents continued living in unsafe conditions for decades, and inadequate oversight led to the lead poisoning of children in WCHC.  Between 2005 and 2015, a…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Department of Justice (DOJ), Washington, DC, and the U.S. Attorney’s Offices for the District of Kansas and the Northern District of Texas in the civil investigation of PrimeLending, a PlainsCapital company.  The investigation was of PrimeLending’s origination, underwriting, and quality control of Federal Housing Administration (…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited Bank of America because it has released more than 47,000 Federal Housing Administration (FHA)-insured loans into the Distressed Asset Stabilization Program (DASP) note sales program.  Since its inception, DASP has facilitated the sale of more than 108,000 FHA loans, which means that Bank of America accounts for nearly half of the entire program…

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…

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…

We audited the multifamily Section 8 project-based rental assistance (PBRA) program at the Villa Main Apartments.  We selected Villa Main in accordance with the Office of Inspector General’s (OIG) goal to review the U.S. Department of Housing and Urban Development’s (HUD) multifamily housing programs and because the OIG Office of Investigation conducted an investigation and suggested that the complex might not have had appropriate controls…

We audited JPMorgan Chase’s (Chase) Federal Housing Administration Home Affordable Modification Program (FHA-HAMP) stand-alone partial claims.  We selected Chase for review based on our analysis of risk factors of loan servicers that filed FHA-HAMP stand-alone partial claims and in accordance with our annual audit plan.  Our audit objective was to determine whether Chase complied with the FHA-HAMP stand-alone partial claim market rate…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Department of Justice (DOJ), Washington, DC, and the U.S. Attorney’s Office for the Middle District of Florida in a civil investigation of Financial Freedom Acquisition, a division of CIT Bank, N.A.  Financial Freedom was originally owned by IndyMac Bank until its failure in 2008, when the Federal Deposit Insurance Corporation…

We audited the multifamily project-based Section 8 program at the Beverly Place Apartments.  We selected Beverly Place because we received a complaint of potential fraud, suggesting that the complex did not have appropriate controls to ensure tenant and unit eligibility.  Our objective was to determine whether the owner administered its project-based Section 8 program in accordance with U.S. Department of Housing and Urban Development…

We audited Park View Care Center’s owner based on a referral from the U.S. Department of Housing and Urban Development’s (HUD) Departmental Enforcement Center.  Our objective was to determine whether the property owner complied with the owner’s regulatory agreement and HUD requirements for the Section 232 program.  Park View’s owner did not comply with all the terms of its regulatory agreement and HUD requirements.  Specifically…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted in an investigation into alleged violations by Reverse Mortgage Solutions, Inc., of Federal Housing Administration (FHA) regulations related to its Home Equity Conversion Mortgage (HECM) program.  The investigation began due to a qui tam filed under the False Claims Act, 31 U.S.C. (United States Code) 3729, in the U.S. District Court for…

We audited Cornerstone Home Lending, formerly known as Cornerstone Mortgage Company.  We selected Cornerstone based upon a high default rate at Cornerstone’s Branch 87 in 2007 through 2009.  Our audit objectives were to determine whether Cornerstone (1) complied with HUD and Federal Housing Administration (FHA) regulations when originating and underwriting FHA-insured mortgages and (2) implemented a quality control plan that met…

At the request of the Director of the U.S. Department of Housing and Urban Development’s (HUD) Houston, TX, Office of Multifamily Housing Programs, we conducted a review of Yale Court Apartments (project).  Our objective was to determine whether the project owner used the project funds in accordance with its regulatory agreement and HUD regulations. The former owner used more than $3.5 million of the project funds for ineligible and…

We conducted a limited review of Federal Housing Administration (FHA) loans underwritten by CTX Mortgage Company LLC. We selected the lender based on the results of an auditability survey, which determined that CTX Mortgage allowed prohibited restrictive covenants to be filed against Federal Housing Administration (FHA)-insured properties. The objective of our review was to determine the extent to which CTX Mortgage failed to prevent the…