Philadelphia Regional Alliance of HUD Tenants, OTAG and ITAG, Philadelphia PA
Support unsupported expenditures of $60,750 that were drawn down for the grant. For any unsupported expenditures require grantee reimburse HUD.
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Carrington Mortgage Misapplied FHA's Foreclosure Requirements
We performed an audit of Carrington Mortgage’s compliance with Federal Housing Administration (FHA) requirements for foreclosures that started in 2022. Pursuant to the Coronavirus Aid, Relief and Economic Security Act (CARES Act), as extended by the Secretary, from March 18, 2020, through July 31, 2021, there was a pause on new and ongoing foreclosures for FHA single‐family mortgages for homes that remained occupied. We selected Carrington because it was among the first servicers to resume initiating foreclosures after the moratorium ended with a foreclosure rate above 1 percent.
MidFirst Bank Misapplied FHA’s Foreclosure Requirements
We performed an audit of MidFirst’s compliance with Federal Housing Administration (FHA) requirements for foreclosures that started in 2022. Pursuant to the Coronavirus Aid, Relief and Economic Security Act (CARES Act), as extended by the Secretary, from March 18, 2020, through July 31, 2021, there was a pause on new and ongoing foreclosures for FHA single‐family mortgages for homes that remained occupied.
HUD Needs To Improve Its Oversight of PBRA and FHA-Insured PBV Properties Converted Under RAD
Determine an appropriate timeframe in which non-FHA-insured PBRA properties converted under RAD should be initially inspected, work with REAC to ensure that inspections are ordered and completed within that timeframe, and update HUD’s publicly available and internal guidance to ensure consistent messaging in accordance with HUD’s determination.
Status
HUD has not provided a draft plan for corrective action yet.
Analysis
HUD Needs To Improve Its Oversight of PBRA and FHA-Insured PBV Properties Converted Under RAD
Implement adequate procedures and controls to ensure that servicing lenders comply with HUD time requirements in scheduling initial inspections of FHA-insured RAD PBV properties.
HUD Needs To Improve Its Oversight of PBRA and FHA-Insured PBV Properties Converted Under RAD
Develop and implement a plan to review the reserve for replacement accounts for all converted properties from the date on which the account was established to the date of the review. Based on the reviews completed, HUD should take appropriate actions to ensure that reserve for replacement accounts are appropriately funded or determine whether overfunded accounts should have the deposits suspended for a specified period.
HUD Needs To Improve Its Oversight of PBRA and FHA-Insured PBV Properties Converted Under RAD
Develop and implement a process to ensure that the reserve for replacement requirements in HUD’s business documents are consistent for all converted properties.
HUD Needs To Improve Its Oversight of PBRA and FHA-Insured PBV Properties Converted Under RAD
Issue guidance to RAD property owners clarifying that the owner is responsible to follow both the HUD business documents and the property’s business documents and that the most restrictive document indicates the amount and timing of the annual deposits into the reserve for replacement account.
HUD Needs To Improve Its Oversight of PBRA and FHA-Insured PBV Properties Converted Under RAD
Review the HUD business documents, such as the RAD conversion commitment, HAP contract, and regulatory agreement, for the four properties that did not contain consistent reserve for replacement information and update the documents to be consistent as appropriate.
HUD Needs To Improve Its Oversight of PBRA and FHA-Insured PBV Properties Converted Under RAD
Review the reserve for replacement account balances for the 13 properties (11 underfunded and 2 overfunded) to determine whether the balances are maintained in accordance with the applicable HUD requirements and executed HUD business documents and require owners to fully fund any underfunded reserves and determine whether any overfunded accounts should have the deposits suspended for a specified period.