HUD Did Not Have Adequate Controls To Ensure That Partial Claim Notes for FHA Loans Were Properly Tracked for Future Collection

Date Issued

Friday, September 21, 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-LA-0005

Report Type

Audit

Agency Wide

Yes

Number of Recommendations

Questioned Costs

$644,767

Funds for Better Use

$5,376,761

Open Recommendations

This report has 3 open recommendations.

Recommendation Number	Significant Recommendation	Recommended Questioned Costs	Recommended Funds for Better Use
2018-LA-0005-001-B	No	$0	$2,297,706
Coordinate with the Deputy Assistant Secretary for Finance and Budget to board 350 manually paid partial claims that were not boarded into SMART, resulting in funds to be put to better use in the amount of $2,297,706.
2018-LA-0005-001-D	No	$644,767	$0
Obtain the missing mortgage documents for 33 loans and the missing note documents for 40 loans, totaling $644,767 in partial claim notes, and require any unrecorded mortgage documents to be recorded at the appropriate county's office to ensure that HUD's interests are protected. For any missing documents that cannot be obtained, the Deputy Assistant Secretary should require the lender to reimburse HUD for the partial claim note.
2018-LA-0005-001-F	No	$0	$1,055,113
Coordinate with the Deputy Assistant Secretary for Finance and Budget to record lender payments to update the balances for 139 loans in SMART, resulting in funds to be put to better use in the amount of $1,055,113.