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Require the transaction specialist contractor to change its application review process to prevent incomplete applications from being considered during vacant loan sales and that recommendations to approve applications are supported by written analysis.
We audited the Federal Housing Administration (FHA), Office of Asset Sales’ U.S. Department of Housing and Urban Development (HUD)-Held Vacant Loan Sales (HVLS) program. The audit objective was to assess the extent to which HUD achieved its mission objectives for a 2022 vacant loan sale. We noted deficiencies in 52 of 53 HUD-approved applications within the reviewed vacant loan sale. These deficiencies occurred in transactions for all seven purchasers that purchased loans in the sales.
Assess and streamline the processes for preparing, reviewing, and approving the reports as appropriate to ensure that the reports are submitted to Congress on or before the required due date.
Modify the queries used to generate the schedules of properties that accompany the reports to Congress to consider a larger range of dates to ensure that properties that failed consecutive inspections are appropriately identified on all applicable schedules.
Develop and implement adequate controls to ensure that HUD staff with the appropriate level of authority approves extensions to the notices of violation and default cure periods in writing and that documentation is maintained to support such approvals.
Include language in future notices of violation and default clearly stating that owners are required to inspect all units (including vacant units), common areas, grounds, building systems, and sites as part of the owner survey and require owners to include sufficient detail in the surveys to show (1) when the survey was conducted and (2) that the survey was a complete survey of the project.
Corrective Action
Develop and implement adequate procedures and controls to ensure that (1) staff issues notices of violation and default within 15 calendar days of the inspection report release date and (2) the Office of Multifamily Asset Management and Portfolio Oversight is made aware when notices are not issued within 15 calendar days after the inspection report release date and takes action as appropriate to ensure that future notices are issued in a timely manner.
Corrective Action
HUD OIG is conducting an audit of the New York City Housing Authority's fraud risk management practices. Fraud risk management (FRM) helps ensure program integrity by continuously and strategically mitigating both the likelihood and effects of fraud. The objective of our audit is to assess the non-federal entity’s fraud risk management practices including control activities to prevent, detect, and respond to fraud while administering HUD program funds. Specifically, the audit will assess the non-federal entity’s 1) commitment to combating fraud through its orga
We recommend that HUD’s Deputy Assistant Secretary for Single Family Housing ensure that the FHA Resource Center updates its training program to ensure that refresher training on housing discrimination is regularly provided to staff (such as monthly, quarterly, semiannually, etc.).
We recommend that HUD’s Deputy Assistant Secretary for Single Family Housing update policies and procedures regarding discrimination complaints to ensure consistency among customer service representatives in rerouting these complaints to FHEO.
