Open Recommendations

Develop a strategy to comprehensively assess and respond to fraud risks across NYCHA. The strategy should identify who within NYCHA is responsible for designing and overseeing activities to prevent and detect fraud. The strategy should also include how NYCHA will (1) assess fraud risks across NYCHA methodically and periodically, (2) create response plans for fraud risks that are identified, and (3) monitor and evaluate the effectiveness of fraud risk management activities. The strategy should also designate fraud risk responsibilities across NYCHA.

Based on the strategy, (1) complete an assessment of fraud risks across NYCHA, (2) create response plans for fraud risks that are identified, and (3) develop procedures to monitor and evaluate the effectiveness of fraud risk management activities.

Assess whether HUD's other extra-large PHAs have mature fraud risk management programs and use the assessment to develop a strategy to reduce the fraud risk exposure to HUD. The strategy should include working with extra-large PHAs to implement appropriate fraud mitigation activities.

Work with HUD's Chief Risk Officer to issue a notice to all PHAs explaining that PHAs are responsible for fraud risk management and play a role in fulfilling HUD's requirement to identify and mitigate fraud risks. This notice should clearly indicate that PHAs should implement fraud risk management, which includes (1) completing an assessment of fraud risks, (2) creating response plans for fraud risks that are identified, and (3) developing procedures to monitor and evaluate the effectiveness of fraud risk management activities.

Update its QC plan and related processes and procedures to align with requirements for loan selection, including maintaining data and documentation showing how sample sizes and loan selections were determined.

Update its QC plan and related processes and procedures to align with requirements for (1) loan file reviews, (2) assessment of findings, (3) mitigation of findings, and (4) reporting findings to HUD when required.

Provide annual training to its staff and management on HUD requirements for lender QC programs and provide proof of training to HUD.

Conduct up to 1,190 additional post-closing QC reviews to meet sample size and composition requirements and submit the results to HUD, including all findings of fraud or material misrepresentation, along with any other material findings that it is unable to mitigate. If required, loanDepot should execute indemnification agreements or reimburse claims paid to help protect the FHA insurance fund from unacceptable risk.

Review the 32 EPD loans not previously selected for review and submit the results to HUD, including all findings of fraud or material misrepresentation, along with any other material findings that it is unable to mitigate. If required, loanDepot should execute indemnification agreements or reimburse claims paid to help protect the FHA insurance fund from unacceptable risk.

Evaluate its QC files for the 1,579 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 its records did not show have been acceptably mitigated. If required, loanDepot should execute indemnification agreements or reimburse claims paid to help protect the FHA insurance fund from unacceptable risk.

Provide indemnification agreements or documentation to support the 14 loans in which it identified material findings that it did not acceptably mitigate or self-report to HUD. Implementation of this recommendation will protect the FHA insurance fund from an estimated loss of $1,136,089.

We recommend that the Director of CPD's Office of Disaster Recovery require active disaster recovery grantees to report in DRGR other sources of funding used for non-Federal match activities.

We recommend that the Director of CPD's Office of Disaster Recovery develop and implement internal controls to ensure that grantees completely and accurately report non-Federal match activities in DRGR.

Update its QC plan and related processes and procedures to align with requirements for loan selection, including maintaining data and documentation showing how sample sizes and loan selections were determined.

Update its QC plan and related processes and procedures to align with requirements for (1) loan file reviews and reverifications of borrower information, (2) mitigation of findings, and (3) reporting findings to HUD when required.

Demonstrate that its training for staff and management has been updated to reflect changes made to its QC plan and related processes and procedures in response to recommendations 1A and 1B, and to cover the underlying HUD requirements for lender QC programs, and provide proof of training to HUD.

Conduct up to 588 additional post-closing QC reviews to meet sample size and composition requirements and submit the results to HUD, including all findings of fraud or material misrepresentation, along with any other material findings that it is unable to mitigate. If required, CMG should execute indemnification agreements or reimburse claims paid to help protect the FHA insurance fund from unacceptable risk.

Review the 276 EPD loans not previously selected for review and submit the results to HUD, including all findings of fraud or material misrepresentation, along with any other material findings that it is unable to mitigate. If required, CMG should execute indemnification agreements or reimburse claims paid to help protect the FHA insurance fund from unacceptable risk.

Evaluate its QC files for the 242 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 its records did not show have been acceptably mitigated. If required, CMG should execute indemnification agreements or reimburse claims paid to help protect the FHA insurance fund from unacceptable risk.

Provide indemnification agreements or documentation to support the eight loans in which it identified fraud, material misrepresentations, or other material findings that it did not acceptably mitigate or self-report to HUD. Implementation of this recommendation will protect the FHA insurance fund from an estimated loss of $639,397.

We recommend that HUD work with Connecticut and Shelby County to fully realize the program benefits by (1) assessing whether any of the current project activities need to be replaced with more viable project activities, thereby ensuring that any modifications to the project activities will lessen the susceptibility of rain and flood events; (2) assessing whether administrative funds have been properly allocated and charged to identify any possible cost savings; (3) determining whether enough administrative funds or other available funds exist to complete the administration of t

We recommend that HUD conduct onsite or remote monitoring for the City of Minot and Tennessee, which have not had any monitoring since grant inception, to ensure that these grantees are on track to meet their program goals.

We recommend that HUD for its disaster-related program wide activities, revise the action plan and quarterly performance review checklists to a format that more specifically and directly addresses the subject program.

Develop ALU engagement standards and incorporate them into acquisition policies and procedures.

Update guidance to clarify the different roles and responsibilities of the ALU, CO, CS, and COR.