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Action Being Taken To Correct Weaknesses in the Rehabilitation Loan Program

FGMSD-79-14 Published: Mar 14, 1979. Publicly Released: Mar 14, 1979.
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Highlights

The Department of Housing and Urban Development (HUD) has outstanding loans of almost $334 million under its Rehabilitation Loan Program. Of the $334 million, over $53 million has already been returned to HUD as defaulted delinquent accounts and approximately $49 million may ultimately be returned as defaulted delinquent. The Rehabilitation Loan Program provides direct low-cost loans to property owners for the rehabilitation of basically sound structures. Loans are initially serviced by the Federal National Mortgage Association (FNMA). When a borrower becomes 6 months delinquent or is at least 3 months delinquent and misses 3 consecutive payments, the loan is returned to HUD for servicing.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Housing and Urban Development The Secretary, HUD, should direct the HUD Office of Financing and Accounting to develop and submit the design of the revised accounting system for collecting and servicing rehabilitation loans to the Comptroller General for approval.
Closed – Not Implemented
GAO performed a follow-up review that considered the action taken by the agency in regards to the area. The follow-up review showed that the recommended action had not been completed, and a similar recommendation was made in a GAO report issued March 19, 1980.
Department of Housing and Urban Development The Secretary, HUD, should direct the Inspector General, HUD, to review the actions taken pursuant to the recommendations and to those of the task force to ensure that adequate system changes are implemented.
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

Debt collectionDelinquent loansFinancial management systemsHousingHousing repairsLoan defaultsLoan repaymentsMortgage loansMortgage programsUrban development programs