The Department of Housing and Urban Development's policies governing the Home Equity Conversion Mortgage program failed to detect instances where borrowers failed to comply with residency requirements, according to a report.
As many as 67 loans in the program, among a total of 68 loans reviewed, included borrowers who
The inspector general determined that HUD's Office of Single-Family Housing did not have adequate controls in place to prevent the problem.
Of the 67 identified loans, 18 were terminated by servicers during an audit. The inspector general said the remaining 49 loans should be declared in default, and due and payable to reduce the risk of insurance loss totaling up to $1.3 million.
The inspector general projected that an additional 642 loans may also have violated residency requirements; these should also be declared in default, to reduce the risk of insurance loss totaling up to $14.4 million.
