The U. S. Department of Housing and Urban - Office of Inspector General audited the Federal Housing Administration’s (FHA) Title II single-family lender renewal process. Our objective was to determine whether FHA’s Lender Approval and Recertification Division’s (Division) controls were adequate for determining whether lenders met FHA annual renewal requirements. The Division had taken significant steps to strengthen its controls over the lender renewal process; however, additional improvements are needed.

The U.S. Department of Housing and Urban Development – Office of Inspector General audited the Federal Housing Administration because we noted during previous audit work that FHA might not have a system in place to track lenders who voluntarily left the FHA program with outstanding indemnification agreements. Our objective was to determine whether FHA prevented corporate officers from participating in FHA programs after those officers left other lenders that did not honor their FHA indemnification agreements.

We conducted the audit of the Retreat at Santa Rita Springs (community), a Federal Housing Administration-insured multifamily property under the Section 231 of the National Housing Act, in response to a congressional request from Representative Gabrielle Giffords of the 8th Congressional District of Arizona. In November 2009, the owners of the community defaulted on its $29.9 million U.S.

We audited the U.S. Department of Housing and Urban Development’s (HUD) field review appraisal process. This audit was conducted as part of the HUD Office of Inspector General’s (OIG) fiscal year 2011 annual audit plan and was designed to follow up on selected findings in OIG’s Audit Report 2008-LA-0003 on the appraiser review process.

We audited the U.S. Department of Housing and Urban Development’s (HUD) preclosing and postclosing loan review of new Federal Housing Administration (FHA) direct endorsement lenders to determine whether HUD followed its guidance when (1) reviewing the initial loans underwritten by new FHA direct endorsement lenders and (2) performing the postendorsement technical review of all of the initial loans endorsed by newly approved direct endorsement lenders.

We reviewed Federal Housing Administration (FHA)-insured loan settlement documents from two branches of DHI Mortgage Company, LTD (DHI Mortgage), in Arizona. During a previous audit of loan origination by the same branches (audit report number 2009-LA-1018), there was information indicating that the Real Estate Settlement Procedures Act (Act) might have been violated; however, we were unable to report on the issue at the time.

The U.S. Department of Housing and Urban Development (HUD) – Office of Inspector General (OIG) reviewed 46 Federal Housing Administration (FHA) loans that Pierce Commercial Bank underwrote as an FHA direct endorsement lender. Pierce was a supervised FHA direct endorsement lender located in Tacoma, WA. This case was referred to us by OIG’s Office of Investigation. Our review objective was to determine whether Pierce underwrote 46 loans in accordance with FHA requirements.

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, reviewed Blue Mountain Hospital (Hospital) based on a request from the Office of Healthcare Programs. The objective of our review was to determine whether the Hospital had adequate written procedures for collecting, dispersing, and accounting for project funds. The Hospital did not have adequate written procedures for collecting, disbursing, and accounting for project funds. The Hospital had only a general finance policy manual, which was developed after operations started.

We audited TXL Mortgage Corporation, a nonsupervised direct endorsement lender located in Houston, TX. We selected TXL due to one of its loan correspondents’ high default rate. Our audit objectives were to determine whether TXL acted in a prudent manner and complied with U.S.

We audited AmericaHomeKey, Inc., a Federal Housing Administration (FHA) direct endorsement lender in Dallas, TX. We selected AmericaHomeKey for audit because during our review of Gold Financial Services (2011-FW-1002), an AmericaHomeKey branch office, we identified three loans originated by one of its underwriters that contained underwriting and valuation deficiencies. Our objective was to determine whether AmericaHomeKey originated manufactured home loans in accordance with U. S.