According to information from the online database, the only exception is linked to a settlement between HUD and MetLife Home Loans in 2018. This settlement arose from accusations that the lender and the son of a reverse mortgage borrower failed to adhere to HECM loan requirements set by the Federal Housing Administration (FHA).
After a loan review in 2017, HUD informed MetLife and the borrower’s son about their potential liability under the Program Fraud Civil Remedies Act of 1986. This was due to the alleged false claim made regarding the eligibility of an FHA HECM loan. MetLife was found to have underwritten the loan without ensuring that the signatories had the legal authority to execute it.
The issue involved an indemnification agreement aimed at preventing a potential $95,769 loss to HUD. MetLife settled by paying $4,000 to HUD, and the borrower’s son paid $1,500, resolving matters in the eyes of the OIG.
In January 2012, MetLife ceased its forward mortgage operations but continued as a reverse mortgage lender. Just four months later, the company exited the reverse mortgage business, selling its portfolio to Nationstar Mortgage. MetLife had pioneered a financial assessment for reverse mortgage borrowers to prevent tax and insurance defaults but later suspended this initiative.
Three of the four outstanding HECM-related issues flagged by HUD OIG pertain to the program’s residency requirements, mandating that a HECM borrower must occupy the home as their primary residence.
The OIG’s recommendations in 2014 and subsequent years aimed to enhance HUD’s single-family insurance programs’ integrity by addressing residency issues in the HECM program. Audits revealed instances where borrowers were not residing in the properties associated with their loans due to participation in the Voucher program.
HUD was urged to implement controls to curb violations of residency requirements, particularly for borrowers concurrently benefiting from the Voucher program. The lack of such controls posed risks to the FHA’s insurance fund.
Despite some corrective actions being implemented, HUD’s 2021 recommendation emphasizes the need for coordinated efforts across housing offices to enforce residency requirements among HECM borrowers.
Regarding unresolved recommendations from previous years, HUD cited challenges due to staff turnover for the lack of corrective actions.