Bank of America, Plano, TX, Followed the Loss Mitigation Requirements for All of the Loans Reviewed

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited Bank of America because it has released more than 47,000 Federal Housing Administration (FHA)-insured loans into the Distressed Asset Stabilization Program (DASP) note sales program. Since its inception, DASP has facilitated the sale of more than 108,000 FHA loans, which means that Bank of America accounts for nearly half of the entire program. This is the fourth in a series of audits on DASP. The first three audits (2017-KC-0006, 2017-KC-0010, and 2018-KC-0003) examined HUD and focused on the program’s requirements, processes, controls, and oversight. Our audit objective for this audit was to determine whether Bank of America properly followed all loss mitigation requirements for loans released into DASP. We found that Bank of America followed the loss mitigation requirements for all of the loans we reviewed. For those loans without a completed loss mitigation process, the main reasons loss mitigation was not performed related to a lack of homeowner participation or homeowner documentation. This report contains no recommendations.