HUD Should Strengthen Mortgagee Monitoring To Reduce Losses
CED-81-108
Published: Jun 09, 1981. Publicly Released: Jul 09, 1981.
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Highlights
Mortgagees approved by the Department of Housing and Urban Development (HUD) are responsible for originating and servicing HUD-insured, single-family loans. If a mortgagee fails to adequately assess a prospective home buyer's ability to repay a loan or fails to provide proper servicing of that loan, then defaults, foreclosures, and substantial losses to the Federal Government can occur. HUD primarily monitors this program through its Office of Mortgagee Activities. If mortgagees violate HUD requirements in connection with their HUD-insured lending activities, HUD can impose sanctions against them through its Mortgage Review Board.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Housing and Urban Development | The Secretary of HUD should require the Office of Mortgagee Activities to play a stronger role in the quality control of mortgagee reviews by requiring more timely reporting of review findings to mortgagees, more followup reviews on prior mortgagee deficiencies, and the use of coordinated reviews to monitor the largest mortgagees or those active in HUD-insured programs nationwide. |
Closed – Implemented
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
|
| Department of Housing and Urban Development | The Secretary of HUD should direct the Office of Mortgagee Activities (OMA) and all HUD area offices to follow existing HUD procedures on selecting mortgagees for origination and servicing reviews and require that area offices submit to OMA, in advance, the required quarterly mortgagee review itineraries and document reasons why mortgagees were selected for servicing reviews. |
Closed – Implemented
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
|
| Department of Housing and Urban Development | The Secretary of HUD should revise the methods the Office of Mortgagee Activities and HUD regional offices use to set area office mortgagee-servicing review goals to ensure that factors such as the number of mortgagees and their total HUD-insured loan portfolio, other area office workload priorities, and review staff availability and experience levels are considered. |
Closed – Implemented
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
|
| Department of Housing and Urban Development | The Secretary of HUD should reassess how mortgagee reviews can be conducted most effectively to cover active mortgagees and evaluate alternative ways to provide necessary review coverage. |
Closed – Implemented
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
|
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Topics
Community development programsHomeowners loansMonitoringMortgage loansMortgage programsMortgage protection insuranceProgram managementForeclosuresMortgage foreclosuresHousing