HUD Did Not Always Implement Corrective Actions To Further Ensure That HECM Borrowers Complied With Principal Residency Requirements
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COVID-19 Forbearance Data in HUD’s Single Family Default Monitoring System Generally Agreed With Information Maintained by Loan Servicers
We audited lender reporting of COVID-19 forbearances for Federal Housing Administration (FHA)-insured loans in the Single Family Default Monitoring System (SFDMS). We compared default reporting data from SFDMS to loan data provided by five sampled servicing lenders that serviced a third of the FHA single-family portfolio. Our audit objective was to determine whether COVID-19 forbearance data available in SFDMS were consistent with the information maintained by loan servicers.
Flood Insurance During Servicing
HUD OIG is auditing the risk to the FHA fund from uninsured flood damage. The objective of this audit is to determine whether borrowers of FHA-insured loans maintained proper flood insurance coverage. This audit will cover FHA-insured forward and reverse mortgages active throughout calendar year 2020.
Evaluation Closure – Federal Housing Administration Residency Requirements
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.
Key Considerations From Prior Audits of the Single Family Default Monitoring System and the Partial Claim Loss Mitigation Option
We prepared this memorandum to provide the Office of Housing at the U.S. Department of Housing and Urban Development (HUD) with key considerations from prior audits of the HUD Single Family Default Monitoring System (SFDMS) and the partial claim loss mitigation option. These audits identified HUD’s lack of effective controls to ensure that lenders reported default information accurately and in a timely manner, lenders promptly filed and reported partial claims, and partial claims fully reinstated delinquent loans.
Federal Housing Administration - CARES Act Forbearance
HUD OIG is auditing HUD's Office of Single-Family Housing - Federal Housing Administration (FHA) program partly in response to media reports which have highlighted instances when lenders did not properly administer the COVID-19 forbearance options. The audit objective is to determine whether FHA insured borrowers properly received the CARES Act forbearance options.
HUD's Section 184 Real Estate Owned (REO) Trust Property Sales
HUD OIG is reviewing HUD's real estate owned (REO) program for Section 184 Tribal Trust land properties. Through this program, HUD can sell foreclosed properties previously endorsed under section 184 of the Housing and Community Development Act of 1992. The objective of the review is to determine whether HUD is appropriately tracking, marketing, and selling REO Section 184 Tribal Trust Land properties.
HUD's Oversight of FHA Refunds
HUD OIG is auditing HUD’s oversight of Federal Housing Administration (FHA) refunds. FHA insures mortgages to increase homeownership opportunities. An upfront insurance premium, paid at the time of closing, is refundable if the loan ends early, whether through sale, foreclosure, or refinancing. We received a hotline complaint describing roadblocks to obtaining refunds.
HUD's COVID-19 Forbearance Reporting
HUD-OIG is auditing COVID-19 single family forbearance reporting. The audit will help HUD to determine how accurately the servicers are reporting the forbearance assistance offered to their customers. The audit will further enable HUD to adequately forecast the performance of its FHA loan portfolio in order to maintain an adequate capital ratio. The audit objective is to determine whether data available in HUD’s single family default monitoring system (SFDMS) is consistent with information maintained by loan servicers.
Key Considerations and Lessons Learned From Prior Audits of FHA Partial Claims
HUD OIG is researching prior audits of HUD’s partial claims loss mitigation option. On July 8, 2020, FHA issued Mortgagee Letter 2020-22 informing mortgagees the full suite of loss mitigations available to single family borrowers affected by the COVID-19 pandemic. The purpose of this research is to provide HUD information regarding lessons learned and risks identified in these prior audits that HUD should act on now to ensure program integrity and mitigate the risk of financial loss for COVID-19 related partial claims.