Millions of Dollars in Delinquent Mortgage Insurance Premiums Should Be Collected by the Department of Housing and Urban Development

FGMSD-77-33: Published: Sep 8, 1977. Publicly Released: Sep 8, 1977.

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In a 14-month period ended March 1977, an average of $38 million per month in mortgage insurance premiums was past due to the Department of Housing and Urban Development (HUD) because many lending institutions did not pay their bills on time. By changing its premium collection cycle from a yearly to a monthly basis, the agency could save the Government $16.5 million in interest costs.

HUD does not: promptly identify delinquent premiums due and notify lending institutions of the delinquencies; use effective collection procedures; charge interest for late payments; or use its authority to suspend persistently delinquent lending institutions from the program. HUD has outlined specific actions taken and planned to collect delinquent premiums, improve accounting and supporting computer systems, and get prompt payments of future premiums. However, HUD does not agree that insurance premiums should be collected monthly.

Recommendations for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Housing and Urban Development should: collect all delinquent mortgage insurance premiums; identify all mortgage insurance premiums that have not been received at the agency within 15 days after the due date and promptly notify institutions that have not paid the premiums; amend agency regulations to provide for late payment charges on premiums paid more than 15 days after the due date; suspend from agency programs institutions that consistently pay premiums late; establish effective internal controls to help make sure that all mortgage transaction documents submitted by mortgagees are properly entered in the master billing file; consider collecting mortgage insurance premiums from institutions in the same month the premium installments are paid by homeowners; and annually reconciling differences between institutions' insurance records and the agency's billing database.

    Agency Affected:

  2. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Housing and Urban Development should: collect all delinquent mortgage insurance premiums; identify all mortgage insurance premiums that have not been received at the agency within 15 days after the due date and promptly notify institutions that have not paid the premiums; amend agency regulations to provide for late payment charges on premiums paid more than 15 days after the due date; suspend from agency programs institutions that consistently pay premiums late; establish effective internal controls to help make sure that all mortgage transaction documents submitted by mortgagees are properly entered in the master billing file; consider collecting mortgage insurance premiums from institutions in the same month the premium installments are paid by homeowners; and annually reconciling differences between institutions' insurance records and the agency's billing database.

    Agency Affected:

 

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