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Consider implementing a policy to review any of the 292 loans not reviewed as part of this audit that result in a request for claim to ensure that the loans qualified for endorsement under the temporary endorsement policy so that HUD can avoid unnecessary payments for loans that should not have been endorsed.
Update data in HUD’s system for the three cases in which the lender incorrectly reported the loans as in COVID-19 forbearance at the time of endorsement to ensure that accurate data are maintained.
For any of the 3,024 loans found to be subject to the temporary policy or otherwise ineligible for insurance, require the lenders to execute indemnification agreements covering a period of at least 5 years or reimburse HUD for any claims to put up to $26,840,071 to better use by protecting HUD against potential losses. For any indemnification agreements executed, HUD should properly store the agreements and record the agreement data.
Request and analyze data from lenders for the 3,024 loans at risk of noncompliance to identify loans that should have been subject to the temporary endorsement policy or were otherwise ineligible for insurance. The data requested should include but not be limited to the dates when the borrower requested forbearance, the loan became subject to forbearance, and the loan was submitted for endorsement.
Obtain guidance from the Office of General Counsel regarding the implications of allowing lenders to retroactively apply forbearance in cases in which the borrower requests forbearance after the lender submits the loan for endorsement to ensure that it consistently handles such cases.
Require lenders to execute indemnification agreements covering a period of at least 5 years for each of the 20 loans for which the lenders did not comply with the temporary endorsement policy and related instructions, including loans for which the lenders did not execute an agreement when required or that were otherwise ineligible for insurance, and properly store the agreements and record the agreement data to put up to $1,811,238 to better use by avoiding potential losses.
We audited the U.S.
HUD OIG is auditing a California-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 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.
