Home Improvement: Weaknesses in HUD's Management and Oversight of the Title I Program
RCED-98-216
Published: Jul 16, 1998. Publicly Released: Jul 16, 1998.
Skip to Highlights
Highlights
Pursuant to a congressional request, GAO reviewed the Department of Housing and Urban Development's (HUD) administration of the National Housing Act Title I program, focusing on: (1) the extent to which the information needed to manage the program was available to HUD; (2) the extent to which HUD was overseeing the program's lenders; (3) whether options and information presented by Price Waterhouse in its HUD-commissioned study of the Title I program could provide lenders with greater incentives to improve loan underwriting and servicing; and (4) whether HUD has any efforts planned or under way to strengthen its management and oversight.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Housing and Urban Development | To promote effective management and accountability in the Title I program, the Secretary of Housing and Urban Development should direct the Assistant Secretary for Housing-Federal Housing Commissioner to improve the information available to manage the program by ensuring that information on the types of loans made is accurate and recorded correctly in HUD's data systems. |
Closed – Implemented
According to a Federal Housing Administration official, the Department has completed cleaning up its Title I database including types of loans--direct and dealer loans.
|
| Department of Housing and Urban Development | To prompt effective management and accountability in the Title I program, the Secretary of Housing and Urban Development should direct the Assistant Secretary for Housing-Federal Housing Commissioner to improve the Title I claims examination process by ensuring that: (1) the documents included in the claim files clearly explain why a claim that was originally denied was subsequently paid and which program official authorized payment; (2) all documents required by the program's guidelines and regulations, including the original loan application, inspection report, and completion certificate, are contained in the claim application package before a claim is paid; (3) the number of claims subject to an underwriting review is increased by extending the length of time after origination during which loan defaults are subjected to review, with notification of this change sent to lenders in writing; and (4) procedures are developed to routinely provide the Quality Assurance Division with the information collected during the claims examination process that is needed to monitor and target lenders for review. |
Closed – Implemented
In 1998, HUD required that information on loan denials and the official's name who authorized payment be placed in loan files; issued a new claims examination manual describing the documents that are needed in a claims file before a claim can be paid; and expanded the number of claims that are reviewed for underwriting problems by requiring those claims whose loans defaulted in 24 or fewer months be reviewed. However, HUD reports that information collected during the claims examination process is already available to the lender monitors.
|
Full Report
Office of Public Affairs
Topics
Claims processingData collectionFederal agency reorganizationFederal aid for housingHousing programsInternal controlsLending institutionsLoan defaultsProperty improvement loansMortgage programs