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HUD OIG is auditing an Oklahoma-based mortgage lender that services FHA single-family loans. Servicers initiate foreclosure when defaulted borrowers cannot or will not resume and complete their mortgage payments. Our objective is to determine whether the servicer (1) established that borrowers were ineligible for loss mitigation assistance before commencing foreclosure, and (2) reviewed requests received during foreclosure before continuing.
HUD OIG is conducting an audit of HUD's Office of Single Family Housing's oversight of the COVID-19 foreclosure moratorium. Using a moratorium beginning March 18, 2020 through July 31, 2021, Section 4022 of the CARES Act temporarily prohibited foreclosures, with the exception of vacant or abandoned homes. Our audit objective is to determine if servicers followed the requirements of the COVID-19 pandemic foreclosure moratorium.
HUD OIG is auditing the Office of Asset Sales' HUD-Held Vacant Loan Sale (HVLS) program, which is another disposition option for defaulted FHA notes HUD uses to reduce losses and improve recoveries for FHA’s Mutual Mortgage Insurance Fund. In the HLVS 2022-2 part 1 sale, 703 loans were awarded to qualified mission-driven entities, representing $105.1 million in unpaid principal balance. The audit objective is to assess the extent to which HUD has ensured the achievement of its mission objectives for the HVLS 2022-2 part 1 loan sale.
We recommend that the Acting Deputy Assistant Secretary for Single Family Housing require the CORs to ensure that contractor past performance evaluations are prepared at least annually and as required by HUD policy to ensure that reporting of contractors is completed properly and in a timely manner for contract options and in CPARS.
We recommend that the Acting Deputy Assistant Secretary for Single Family Housing coordinate with OCPO to require the contracting officers and CORs to monitor contractor performance to ensure that evidence is maintained and documented in the contract files for each performance statement completed in the FSM QASPs and that contractor quality control report deliverables resolve problems identified by the Government during reviews conducted in accordance with the QASP for its future FSM contracts.
We recommend that the Acting Deputy Assistant Secretary for Single Family Housing coordinate with OCPO to require that the contracting officers and CORs be involved in the development, implementation, and documentation of the FSM QASPs for their FSM contracts to ensure that performance statements, acceptable quality levels, and deviation percentages are aligned with the contracts’ requirements in the performance work statement, the performance requirement summary, and the contractor’s quality control plan.
Update APPS to automatically flag a property that receives successive below-60 REAC inspection scores.
Implement a quality control review to ensure that successive below-60 REAC inspection score flags are entered into APPS.
We recommend that the Deputy Assistant Secretary for Single Family Housing work with the Office of Public Affairs, Office of Housing Counseling, and other offices within HUD to develop a detailed communication strategy for how and when it plans to use websites, letters, and other methods to proactively notify homeowners about relief programs, protections, and loss mitigation options during disasters and national emergencies.
We recommend that the Deputy Assistant Secretary for Single Family Housing update its COVID-19 Resources for Homeowners webpage to include relevant information on the U.S. Department of the Treasury’s Homeowner Assistance Fund.
