Federal Reports

To learn how communities across the nation responded to the pandemic, we initiated a multi-part review of six communities—two cities, two rural counties, and two Tribal reservations. This report is the fourth community-specific report and focuses on our work in White Earth Nation Reservation in Minnesota, where we previously identified that recipients, including city government, small businesses, and individuals, received almost $278 million from 56 pandemic relief programs and subprograms. This report provides a closer look at ten pandemic programs and subprograms provided to White Earth Nation Reservation by seven federal departments.

We audited loanDepot.com to evaluate its quality control (QC) program for originating and underwriting Single Family Federal Housing Administration (FHA)-insured loans.  We selected loanDepot for review based on its loan volume and delinquency rate and because its rate of self-reporting loans to HUD when it identified fraud, material misrepresentations, and other material findings that it could not mitigate was below average for more than a 5-year period.

 We found that loanDepot’s QC program for originating and underwriting FHA-insured loans was not sufficient.  Specifically, loanDepot (1) did not select the proper number of loans for review and maintain complete and accurate data to document its loan selection process; (2) missed material deficiencies; and (3) did not adequately assess, mitigate, and report loan review findings, which included self-reporting loans to HUD when required.  These issues occurred because loanDepot had insufficient controls over its QC program.  As a result, HUD did not have assurance that loanDepot’s QC program fully achieved its intended purposes, which include, among other things, protecting the FHA insurance fund and lender from unacceptable risk, guarding against fraud, and ensuring timely and appropriate corrective action. 

 We recommended that HUD require loanDepot to (1) update its QC plan and related procedures to align with HUD requirements; (2) provide training to its staff and management on HUD requirements for lender QC programs; (3) review the loans that it had not selected and take appropriate actions when applicable; and (4) evaluate its QC files for the loans in which it identified material findings to confirm whether it self-reported to HUD all findings of fraud or material misrepresentation, along with any other material findings that it did not acceptably mitigate.

The Office of Inspector General (OIG) is issuing this report to show those recommendations from U.S. Small Business Administration (SBA) Office of Inspector General (OIG) reports that remained open as of December 31, 2024. As of that date, there were 166 open OIG recommendations. SBA provided updates for certain recommendations prior to the date of this report which may still be under review by OIG. The status of each recommendation is subject to change as we independently review SBA’s ongoing implementation.