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Volume 7 - Number 21

October 10, 2014

HECM Borrowers Found Violating Residency Rule

An internal audit found as many as 136 borrowers not living in the properties for which they have obtained FHA-insured reverse mortgages because they were also receiving federal housing assistance under a different address. The Department of Housing and Urban Development’s Office of the Inspector General discovered the anomaly during a follow-up review of HUD’s oversight of the home-equity conversion mortgage program to ensure HECM borrowers comply with residency requirements. A previous audit had red-flagged potential residency violations. In the latest review, auditors analyzed HUD’s data warehouse for single-family mortgages and its public housing information system from April 2011 through March 2014 and identified 159 potential violators of the residency rule. Of those potential violators, 136 were found to be not occupying the properties associated with their HECM loans but, instead, ...

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