Provide training to field staff members to ensure that they have the skills necessary to complete MORs of converted properties.

Review the reserve for replacement account balances for the 13 properties (11 underfunded and 2 overfunded) to determine whether the balances are maintained in accordance with the applicable HUD requirements and executed HUD business documents and require owners to fully fund any underfunded reserves and determine whether any overfunded accounts should have the deposits suspended for a specified period.

Review the HUD business documents, such as the RAD conversion commitment, HAP contract, and regulatory agreement, for the four properties that did not contain consistent reserve for replacement information and update the documents to be consistent as appropriate.

Issue guidance to RAD property owners clarifying that the owner is responsible to follow both the HUD business documents and the property’s business documents and that the most restrictive document indicates the amount and timing of the annual deposits into the reserve for replacement account.

Develop and implement a process to ensure that the reserve for replacement requirements in HUD’s business documents are consistent for all converted properties.

Develop and implement a plan to review the reserve for replacement accounts for all converted properties from the date on which the account was established to the date of the review. Based on the reviews completed, HUD should take appropriate actions to ensure that reserve for replacement accounts are appropriately funded or determine whether overfunded accounts should have the deposits suspended for a specified period.

Implement adequate procedures and controls to ensure that servicing lenders comply with HUD time requirements in scheduling initial inspections of FHA-insured RAD PBV properties.

Determine an appropriate timeframe in which non-FHA-insured PBRA properties converted under RAD should be initially inspected, work with REAC to ensure that inspections are ordered and completed within that timeframe, and update HUD’s publicly available and internal guidance to ensure consistent messaging in accordance with HUD’s determination.StatusAs of July 2025, Multifamily Housing planned to develop and implement adequate policies,…

Perform a complete agency-wide fraud risk assessment (which incorporates the fraud risk assessments performed at the program level) and use the results to develop and implement an agency-wide plan to move HUD’s fraud risk management program out of the ad hoc phase.StatusAs of July 2025, HUD has cancelled its fraud risk management contracts and the Chief Risk Officer position was vacated under the Deferred Resignation Program.  HUD is…

Require MidFirst to remedy the 24 borrowers in our sample with improper foreclosure filings or take administrative actions if appropriate.

Analyze MidFirst’s resolution of the manual process issues identified during its 2022 quality control review to verify that it remedied the borrowers or HUD and corrected the issues identified related to manual processing.

Require MidFirst to update its policies and procedures to comply with HUD requirements by placing foreclosure holds for loss mitigation requests made before the first legal filing.

Fraudsters can take advantage of older adults by pressuring or helping them obtain funding for home repairs by applying for a reverse mortgage and then stealing the funds from the reverse mortgage.  In this fraud bulletin, HUD OIG shares a recent case example where the fraudster was sentenced to more than 17 years in prison and provides tips on how senior homeowners can avoid reverse mortgage scams by purported contractors.

Update guidance to clarify the different roles and responsibilities of the ALU, CO, CS, and COR.

Develop ALU engagement standards and incorporate them into acquisition policies and procedures.

We recommend that the Chief Procurement Officer develop, implement, and communicate requirements for program offices to establish written minimum roles and responsibilities for their respective procurement management functions, including but not limited to CORs, PMs, and SMEs.

Require Carrington to remedy HUD and the 27 borrowers in our sample with improper foreclosure filings and take administrative actions if appropriate.

Require Carrington to perform a review of loans affected by the system errors and when appropriate, remedy the borrowers or HUD.

Require Carrington to update its policies and procedures to comply with HUD requirements by reviewing eligible borrowers for streamlined options without unnecessary documents, notifying borrowers if they are ineligible for any loss mitigation options, and using best efforts to review borrowers for loss mitigation within 37 days of the foreclosure sale date.

Require Carrington to implement improved controls to prevent manual errors by performing additional review of all foreclosure actions and performing timely review of all documentation provided by the borrowers and third parties.