Determine the appropriate timeframe for when initial MORs should be completed for all properties that convert under RAD and issue updated guidance that includes a system to track the timeliness of initial MORs. Status HUD has not provided a draft plan for corrective action yet. Analysis Failure to determine the timing of the initial MORs could delay HUD's performance of the MORs, which may result in property owners'…

Complete the initial MORs for RAD properties that have not had an initial MOR. Status HUD has not provided a draft plan for corrective action yet. Analysis Completing initial MORs would assist HUD in holding property owners accountable for maintaining the conditions of their properties and sufficient reserve for replacement accounts balances, which could impact property owners' ability to make needed capital repairs.…

Develop and implement a plan to determine how to implement the risk-based approach to review the RAD properties that have not had subsequent MORs in more than 3 years and to require periodic MORs going forward. Status HUD has not provided a draft plan for corrective action yet. Analysis Developing a plan to implement the risk-based approach would establish the criteria for identifying properties that are at a higher…

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. Status HUD has not provided a draft plan for corrective action yet. Analysis…

Support unsupported expenditures of $60,750 that were drawn down for the grant. For any unsupported expenditures require grantee reimburse HUD.

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. Status HUD has made steady progress in building its Fraud Risk Management program. In FY 2024, HUD received Congressional approval to establish the Office of the Chief…

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.