Federal Reports

The OIG identified 10 industry best practices for managing major investments organized across three interconnected categories: people, process, and technology. In terms of the role of people, best practices include using internal cross-functional teams and engaging with both internal and external stakeholders. Best practices for improving processes include analyzing market trends and competitor strategies, using data to adapt to changes in volume and capacity, and real-time monitoring of investment performance. Finally, best practices that leverage technology include implementing innovative network designs, standardizing facility designs, adopting flexible technology, and promoting environmentally sustainable technology.

The audit objectives were to determine whether program funds were managed in accordance with the ARC and Federal grant requirements.

We audited Nationstar Mortgage, LLC’s (doing business as Mr. Cooper (Nationstar)) compliance with the Federal Housing Administration’s (FHA) requirements for providing loss mitigation assistance to borrowers after their COVID-19 forbearance ended. We concurrently conducted a nationwide audit of servicers’ compliance with the U.S. Department of Housing and Urban Development’s (HUD) COVID-19 loss mitigation requirements (HUD Office of Inspector General (OIG) Report 2023-KC-0005). This audit complements that audit by examining how a single provider, Nationstar, provided loss mitigation for borrowers coming out of COVID-19 forbearance. We selected Nationstar after completing a risk assessment in 2021 that identified a significant volume of delinquent loans with prior COVID-19 forbearance in its portfolio and based on our awareness of complaints made about Nationstar to the Consumer Financial Protection Bureau and the HUD OIG hotline. Our audit objective was to determine whether Nationstar provided proper loss mitigation assistance to FHA-insured borrowers after the COVID-19 forbearance ended.Nationstar did not provide proper loss mitigation assistance to more than 80 percent of borrowers with delinquent FHA-insured loans after their COVID-19 forbearance ended. Based on a statistical sample drawn from a universe of 4,288 FHA-insured forward loans totaling $767 million, Nationstar did not meet HUD’s requirements for providing assistance to an estimated 3,572. Based on our loan sample projection, more than half of the borrowers received incorrect loss mitigation assistance. In these cases, Nationstar did not provide the loss mitigation option for which borrowers were eligible, incorrectly calculated loss mitigation options, did not reinstate arrearages, or declined loss mitigation in error. More than one-third of the borrowers in our sample projection received the correct loss mitigation option; however, Nationstar did not correctly follow COVID-19 loss mitigation guidance for these borrowers.

The VA Office of Inspector General (OIG) conducted an inspection at the West Texas VA Health Care System in Big Spring (facility) to assess an allegation that community living center (CLC) nursing staff did not respond when a patient experienced a medical emergency.The OIG did not substantiate that facility CLC nursing staff failed to respond to the patient’s medical emergency. The OIG found that although CLC nursing staff responded, the CLC registered nurse was unaware of the facility’s medical emergency policy and, as a result, failed to follow policy by not obtaining the automated external defibrillator (AED) and calling 911 immediately to activate the emergency response.Facility leaders failed to define CLC staff responsibilities when responding to medical emergencies in the CLC and had not provided mock code training to CLC nursing staff since October 2019. At the time of the patient’s medical emergency, a bag-mask device used to assist patients with breathing was not available and staff needed to be trained on how to use an AED. The OIG could not determine if the lack of mock code and AED training and the lack of equipment affected the outcome for this patient.The CLC registered nurse failed to document relevant patient care information during and after the patient’s medical emergency. The OIG determined that the documentation failure did not affect the outcome for this patient, but complete and timely documentation is vital to accurate health information.The OIG made three recommendations to the Facility Director related to ensuring CLC nursing staff are trained on roles and responsibilities when responding to medical emergencies, mock codes are completed within the CLC to include all CLC nursing staff, and all CLC clinical staff meet electronic health record documentation requirements.

We performed an audit of loan servicers’ compliance with the Federal Housing Administration’s (FHA) requirements for providing loss mitigation assistance to borrowers after their COVID-19 forbearance ended. We initiated the audit based on the large number of borrowers exiting forbearance, because the loss mitigation programs available to these borrowers were new and created a risk for both borrowers and the FHA insurance fund when servicers do not properly provide loss mitigation. Our audit objective was to determine whether servicers provided borrowers of FHA-insured loans proper loss mitigation assistance after the COVID-19 forbearance ended.Servicers did not provide proper loss mitigation assistance to approximately two-thirds of delinquent borrowers after their COVID-19 forbearance ended. Based on a statistical sample drawn from 231,362 FHA-insured forward loans totaling $41 billion, servicers did not meet HUD requirements for providing loss mitigation assistance to borrowers of 155,297 FHA-insured loans. Nearly half of the borrowers did not receive the correct loss mitigation assistance. These borrowers did not receive the loss mitigation option for which they were eligible, had their loss mitigation option not calculated properly, or received a loss mitigation option that did not reinstate arrearages, which refers to any amount needed to bring the borrower current. Approximately one-quarter of the borrowers received the correct loss mitigation option, but servicers did not follow COVID-19 loss mitigation guidance to help borrowers with payments that were missed during forbearance.

The report presents the results of our review of the Office for Civil Rights (OCR) process for resolving web accessibility complaints that were previously dismissed and subsequently reopened as directed investigations and OCR’s approach to evaluating web accessibility complaints submitted after the November 2018 revision of its Case Processing Manual. Among our findings, we determined that OCR’s resolution of web accessibility complaints previously dismissed under section 108(t) and subsequently reopened as directed investigations differed from how these reviews were resolved in the past, specifically with regard to whether or not a compliance determination was made, and that determinations made were inappropriate based on the level of testing performed. As a result of OCR’s changes to its procedures and the unclear way these changes were implemented, it could be difficult for people unfamiliar with OCR’s process to understand OCR’s procedures for processing these complaints.