HUD Did Not Always Identify and Collect Partial Claims Out of Surplus Proceeds From Nonconveyance Foreclosures

Date Issued

Thursday, September 20, 2018

Submitting OIG

Department of Housing and Urban Development OIG

Other Participating OIGs

Department of Housing and Urban Development OIG

Agencies Reviewed/Investigated

Department of Housing and Urban Development

Components

Single Family Housing

Report Number

2018-KC-0004

Report Type

Audit

Agency Wide

Yes

Number of Recommendations

Questioned Costs

$5,690,000

Funds for Better Use

$6,770,000

Open Recommendations

This report has 3 open recommendations.

Recommendation Number	Significant Recommendation	Recommended Questioned Costs	Recommended Funds for Better Use
2018-KC-0004-001-A	Yes	$5,690,000	$0
Pursue the collection of the $5,690,000 in surplus proceeds that HUD was entitled to receive from 2017 loan terminations.
2018-KC-0004-001-B	Yes	$0	$0
Implement a policy to require servicers to send surplus proceeds notifications to the HUD Secretary-held assets servicing contractor and establish procedures to improve HUD's surplus proceeds collection efforts.
2018-KC-0004-001-C	Yes	$0	$6,770,000
Redesign the partial claim program to eliminate its weaknesses and ensure that partial claims benefit from a stronger lien position to put $6,770,000 to better use.