We audited the Newark, Delaware, branch office (branch office) of J.P. Morgan Chase bank (J.P. Morgan Chase), a supervised direct endorsement lender approved to originate Federal Housing Administration (FHA) single-family mortgage loans. We selected the branch office because its default rate was above the state’s average default rate. Our objective was to determine whether J.P. Morgan Chase complied with U.S. Department of Housing and Urban Development (HUD) requirements in the origination and quality control review of FHA-insured single-family loans. J.P.

We audited FHA-insured loan processes at two DHI Mortgage Company, LTD (DHI Mortgage) branches in Tucson and Scottsdale, Arizona, to determine whether DHI Mortgage originated, approved, and closed FHA-insured single-family loans in accordance with HUD requirements. We chose DHI Mortgage because the Scottsdale, Arizona, branch had a default rate that was double the default rate for FHA-insured loans for the state of Arizona, and then expanded our review to include the Tucson, Arizona, branch because some loans had both branch numbers on the documentation.

We audited the Fairfax, VA, branch office (branch office) of Prospect Mortgage, LLC (Prospect Mortgage), because it had one of the highest default rates for U.S. Department of Housing and Urban Development (HUD)-approved lenders for loans issued in the State of Maryland. Our objective was to determine whether Prospect Mortgage and its branch office complied with HUD regulations, procedures, and instructions in the origination and quality control review of single-family mortgage loans insured by the Federal Housing Administration (FHA).

We reviewed 19 Federal Housing Administration (FHA) loans Americare Investment Group (Americare) underwrote as an FHA direct endorsement lender. Our review objective was to determine whether Americare underwrote the 19 loans in accordance with FHA requirements. This review is part of Operation Watchdog, an Office of Inspector General (OIG) initiative to review the underwriting of 15 direct endorsement lenders at the suggestion of the FHA Commissioner. The Commissioner expressed concern regarding the increasing claim rates against the FHA insurance fund for failed loans.

We reviewed 20 Federal Housing Administration (FHA) loans that Alacrity Lending Company (Alacrity) underwrote as an FHA direct endorsement lender. Our review objective was to determine whether Alacrity underwrote the 20 loans in accordance with FHA requirements. This review is part of Operation Watchdog, an Office of Inspector General (OIG) initiative to review the underwriting of 15 direct endorsement lenders at the suggestion of the FHA Commissioner. The Commissioner expressed concern regarding the increasing claim rates against the FHA insurance fund for failed loans.

We reviewed 20 Federal Housing Administration (FHA) loans Alethes, LLC (Alethes), underwrote as a FHA direct endorser. Our review objective was to determine whether Alethes underwrote the 20 loans in accordance with FHA requirements. This review was part of Operation Watchdog, an Office of Inspector General (OIG) initiative to review the underwriting of 15 direct endorsement lenders, at the suggestion of the FHA Commissioner. The Commissioner expressed concern regarding the increasing claim rates against the FHA insurance fund for failed loans.

We conducted a review of Federal Housing Administration (FHA) loans underwritten by First Tennessee Bank, N.A. (First Tennessee), an FHA direct endorsement lender. This review was conducted as part of our Operation Watchdog initiative to review the underwriting of 15 direct endorsement lenders at the suggestion of the FHA Commissioner. The Commissioner expressed concern regarding the increasing claim rates against the FHA insurance fund for failed loans. The objective of the review was to determine whether First Tennessee underwrote 18 loans in accordance with U.S.

The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General performed an audit of Consumer Credit Counseling Services of the Midwest (Consumer Credit), an affiliate of the National Foundation for Credit Counseling, Inc. (National Foundation). We selected Consumer Credit based on a citizen’s complaint received by our office. Our objective was to determine whether Consumer Credit complied with HUD’s requirements for housing counseling.

The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General audited National Home Management Solutions (National Home), HUD’s management and marketing contractor for HUD real estate-owned properties in Ohio. We selected National Home based on a citizen’s complaint received by our office. Our objective was to determine whether National Home complied with HUD’s requirements regarding the sale of HUD single-family real estate-owned properties (HUD homes).

The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General performed an audit of Leader Financial Services (Leader), a Government National Mortgage Association (Ginnie Mae) issuer servicing Federal Housing Administration (FHA)-insured loans. We initiated the audit based on the 62 percent delinquency rate of Leader’s mortgage-servicing package purchased from Fidelity Home Mortgage Corporation (Fidelity).