Third Party Tactices: Tips for Managing the Equifax Breach. Read More

Scammers Conning Homebuyers Out of Their Downpayments. Read More

 Mortgage Fraud is On The Rise and Here Is What It Means to You. Read More.

 Law Enforcement Officials See Increased Sophistication in Mortgage Fraud. Read More

 As Mortgages Shift to Purchase Market, So Do Fraud Schemes. Read More

 Coto De Caza man gets 8 years for $2 million home loan cam that target more than 500 people. Read More

 SEC says "first ever cryptocurrency backed by real estate" is a fraud. Read More

 Buzzworthy with Ann Fulmer: Risk Management, Borrower Liens and Judgments Read More

 HUD Must get Better at Stopping Section 8 Fraud Read More

  CitiMortgage, Inc., O’Fallon, MO, Improperly Filed for FHA-HAMP Partial Claims Before Completing the Loan Modifications and Reinstating the Loans Read More

 Former Tulsa Housing Authority executive pleads guilty to audit fraud charge. Read More

 Convicted ex-lender who defrauded taxpayers is skimping on victim payments while living large, feds say Read More.

 Rate Defects Up From Year Ago; Rising Rates Could Spell Further Increase. Read More

 Sounding the Alarm. Mortgage Wire Fraud is a much bigger threat than you realize. Read More

 Ex-Asbury Park Housing Authority Executive Director Admits to $90K Theft. Read More

 CoreLogic: Mortgage Credit Risk Up in 3Q Read More

 Former Falls Housing Director Admits Theft. Read More

 4 More Charged With Sandy Fraud. Read More



Final Civil Action Borrower Settled Allegations of Making False Statements to HUD for a Home Purchase Under the Federal Housing Administration Mortgage Insurance Program

We received a referral from the Quality Assurance Division of the U.S. Department of Housing and Urban Development’s (HUD) Philadelphia Homeownership Center concerning a borrower who allegedly made false statements to obtain Federal Housing Administration (FHA) mortgage insurance.  The borrower provided false and conflicting employment and income information, which was used in originating and obtaining an FHA loan.  Further, the borrower certified that he intended to reside in the property but failed to do so.  We referred the violations to HUD’s Office of Program Enforcement for action under the Program Fraud Civil Remedies Act.

On December 4, 2009, the borrower obtained an FHA loan to purchase a property in Baltimore, MD.  The borrower falsely certified his employment and income information when he signed the uniform residential loan application.  The borrower also falsely represented on the loan application that he intended to occupy the property as his personal residence.  The property was vacant and was being offered for rent in May 2010, 6 months after the settlement date.  The borrower’s actions violated FHA requirements.  On November 17, 2016, HUD’s Office of Program Enforcement filed a complaint against the borrower under the Program Fraud Civil Remedies Act.  After negotiations with HUD, the borrower agreed to pay $10,000 to settle the matter.  The agreement did not constitute an admission of liability or fault by any party.  The borrower made an initial payment of $2,000 on April 11, 2017, and agreed to a repayment plan for the remaining $8,000.

Beverly Place Apartments Subsidized Nonexistent Tenants, Unqualified Tenants, and Tenants With Questionable Qualifications

We audited the multifamily project-based Section 8 program at the Beverly Place Apartments.  We selected Beverly Place because we received a complaint of potential fraud, suggesting that the complex did not have appropriate controls to ensure tenant and unit eligibility.  Our objective was to determine whether the owner administered its project-based Section 8 program in accordance with U.S. Department of Housing and Urban Development (HUD) regulations and guidance.

The owner did not administer the project-based Section 8 program at Beverly Place in accordance with HUD regulations.  It assisted at least 97 tenants who were either ineligible for assistance or whose eligibility could not be supported.  This condition occurred because the owner did not establish effective control systems, which allowed the onsite employees to commit fraud.  The employees falsified tenant eligibility and did not properly verify tenant income as required by HUD.  As a result, HUD paid the owner more than $574,000 in subsidies for ineligible tenants and incurred more than $227,000 in subsidies for which the owner could not support the tenants’ subsidy amounts.

We recommend that the Southwest Region Director of Multifamily Housing require the Beverly Place owner to (1) repay HUD more than $574,000 for housing subsidies received for ineligible tenants and units and (2) support or repay HUD more than $227,000 for units for which managers either did not have a tenant file or did not obtain required earned income verification reports to verify eligibility.  In addition, HUD should require its contract administrator for Beverly Place to ensure that the owner’s recently implemented quality control program is working as designed.