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HUD OIG is conducting an audit of HUD’s HECM Life Expectancy Set Asides within the Office of Housing. In 2015, HUD set a requirement for some HECM borrowers to maintain a Life Expectancy Set Aside to pay for future property taxes, insurance premiums, and flood insurance on behalf of the borrower. Our objective is to determine if HUD’s HECM Life Expectancy Set Aside calculations are meeting program goals.
Housing should coordinate with HUD’s SOC to a. Ensure that FHA Catalyst user behavior monitoring logs are regularly captured and adequately reviewed for discrepancies in user activities. b. Establish program office responsibility for the log review process.
Housing should refine access controls within the FHA Catalyst modules that are dynamic, are tailored to user actions, and require continuous reauthentication to ensure that users have access only to information needed.
Housing should include zero trust requirements as part of the Housing Strategic Roadmap for Housing Modernization.
Issue an industry wide letter to reinforce how intake, screening, and enforcement of timeframes will be handled.
Update policies and procedures to include methods that will be used when applications exceed underwriter capacity, align intake and screening processes, and explain when timeframes will be enforced, including in PLUS.
Require that the PLUS system for receiving, processing, and assigning applications tracks applications and captures application intake, screening, and status, including key dates; captures data on the type of underwriter used; includes a portal for receiving documents and communicating with lenders; and generates FHA loan numbers. This will allow HUD to identify, monitor, and address processing delays and issues on a continuous basis; evaluate its performance and processes; and manage future challenges.
Improve quality assurance processes by adding steps to verify that the appraiser roster is accurate and reliable over time through testing of its logic-based system controls and data fields.
Maintain historical data for each appraiser record, including history on expiration dates, when appraisers are moved on or off the appraiser roster and when they are and are not allowed to be assigned to conduct appraisals.
Update relevant policies and procedures for appraiser roster management so that they align with each other and with regulations and reflect HUD practice. At a minimum, the policies and procedures should clearly cover appraiser roster status, license expiration, disciplinary actions, removals, data accuracy, and documentation.
