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Reverse Mortgage Solutions, Inc., Settled Alleged Violations of Federal Housing Administration Loan Requirements Related to Home Equity Conversion Mortgages

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.

First Source Bank, South Bend, IN, Did Not Always Properly Implement Its Loss Mitigation and Quality Control Programs in Accordance With HUD Requirements

We audited First Source Bank, a Federal Housing Administration (FHA) supervised lender located in South Bend, IN.  We selected First Source based on our analysis of risk factors of single-family loan servicers in Region 5’s jurisdiction4.   Our audit objectives were to determine whether First Source (1) consistently and appropriately applied loss mitigation options for eligible borrowers, (2) accurately reported the default and 90-day delinquency status of FHA-insured loans, and (3) performed servicing quality control reviews that met the U.S.