FHA Paid Claims for an Estimated 239,000 Properties That Servicers Did Not Foreclose Upon or Convey on Time

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FHA Paid Claims for an Estimated 239,000 Properties That Servicers Did Not Foreclose Upon or Convey on TimeOpen this document with ReadSpeaker docReader

Date Published:
Friday, October 14, 2016
Publication/Report Type:
Audit Reports
Report Number:
2017-KC-0001
Program Area(s):
Federal Housing Administration (FHA), Single Family Housing
State:
District of Columbia
Summary:

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited HUD to determine whether it paid servicers’ claims for properties that did not foreclose or convey on time.  We initiated this audit due to concerns that HUD overpaid servicers’ claims for FHA insurance benefits.

HUD paid claims for an estimated 239,000 properties that servicers did not foreclose upon or convey on time.  HUD paid an estimated $141.9 million for servicers’ claims for unreasonable and unnecessary debenture interest that was incurred after the missed foreclosure or conveyance deadline and an estimated $2.09 billion for servicers’ claims for unreasonable and unnecessary holding costs that were incurred after the deadline to convey.

We recommend that HUD issue a change to 24 CFR (Code of Federal Regulations) Part 203, which corrects deficiencies that allowed an estimated $2.23 billion in unreasonable and unnecessary costs to the FHA insurance fund. These changes include a maximum period for filing insurance claims and disallowance of expenses incurred beyond established timeframes.  We recommend that HUD develop a strategic information technology plan to make significant operational changes to HUD’s monitoring of single-family conveyance claims to ensure that servicers comply with foreclosure and conveyance timeframes.  We also recommend that HUD develop and implement controls to identify noncompliance with current regulations at 24 CFR 203.402.

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Comments
One Response to “FHA Paid Claims for an Estimated 239,000 Properties That Servicers Did Not Foreclose Upon or Convey on Time”
  1. Tom says:

    Well, maybe that explains partially why they wouldn’t allow me to payoff the mortgage in full because they already collected the insurance payout and they had to force the foreclosure.
    PMI/MIP insurance scam! The motivating factor in the forced foreclosure scams!

    If you think about it, it’s not much different than having their customers get hit with bogus added on bank accounts without them knowing about it. The CEO from Wells Fargo made millions on that scam, retired and walked away free.

    Tell the people that had FHA loans, where they were forced to pay the premiums on that PMI/MIP scam insurance, which was supposedly to protect the homeowners in case of future financial hardships, and then the banksters, corrupt judges, and scumbag lawyers collect the payouts, is a huge scam!

    And this is what the taxpayers were required to bail out?
    It must be nice to rob a bank from the inside, ruin your customers lives in the process, collect huge bailouts where you can take 8 figure bonuses for your crimes from that bailout money, and then start thinking of new ways to financially rape your customers.

    So why is it that they won’t do anything about the massive fraudclosures?
    Is it because there are too many high level people involved in that scam? Too many high level politician’s involved from the start of the fraud?
    (Those so-called fines that are supposed to look like penalties are nothing more than a way for the other people involved in the scam to receive their kickbacks from the fraud. That’s why no one is going to jail)

    And they wonder why crime rates are going up!
    The system is totally broken with the wealthy corrupt stealing whatever they can from the struggling poor.

    The wealthy corrupt steal from the struggling poor, it is called business!
    If the struggling poor try to steal back from the wealthy corrupt, it’s called a crime!

    Things are really going to get nasty after the elections are over!
    Which is basically trying to pick out the cleanest turd in a two turd bucket!

    Wake up people!

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