We prepared this memorandum to provide the Office of Housing at the U.S. Department of Housing and Urban Development (HUD) with key considerations from prior audits of the HUD Single Family Default Monitoring System (SFDMS) and the partial claim loss mitigation option. These audits identified HUD’s lack of effective controls to ensure that lenders reported default information accurately and in a timely manner, lenders promptly filed and reported partial claims, and partial claims fully reinstated delinquent loans. Prior audits also identified that the current design of partial claims results in an inferior lien position on the securing property during a foreclosure sale. HUD should address these situations now to ensure program integrity and minimize the risk of financial loss during the novel coronavirus (COVID-19) national emergency.
Report File
Date Issued
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
Federal Housing Administration (FHA)
Report Number
2021-KC-0801
Report Description
Report Type
Audit
Special Projects
Pandemic
Agency Wide
Yes
Number of Recommendations
0
Questioned Costs
$0
Funds for Better Use
$0