Iowa Audit Reports

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Issue Date: April 22, 2008
Audit Report No.: 2008-KC-1003
File Size: 363.68KB

Title: The Des Moines Municipal Housing Agency, Des Moines, Iowa, Did Not Always Assign Proper Voucher Sizes or Accurately Calculate Overpayments From Unreported Income In Its Section 8 Housing Choice Voucher Program

The U.S. Department of Housing and Urban Development's (HUD) Office of Inspector General audited the Housing Choice Voucher program of the Des Moines Municipal Housing Agency (Agency) to determine whether the Agency (1) properly considered family composition and reasonable accommodation requests when applying payment standards and (2) took appropriate action when the tenants’ files had indications of unreported income. We found that the Agency allowed 59 of the 148 households we reviewed to have units that were larger than permitted by regular subsidy standards. The Agency also improperly processed 16 of the households we reviewed with indications of unreported income.

We recommend that HUD require the Agency to reimburse its program more than $78,000 from administrative fee reserves and pursue collection of nearly $21,000 from tenants with unreported income. We also recommend that HUD require the Agency to develop and implement procedures and controls to ensure that each tenant receives the proper voucher size and to ensure the proper correction for unreported income.

Issue Date: October 25, 2006
Audit Report No.: 2007-KC-1002
File Size: 413.68

Title: Manufactured Home Lending by Wells Fargo Home Mortgage, West Des Moines, Iowa

HUD-OIG audited Wells Fargo Home Mortgage (Wells Fargo) because it is the largest Title II manufactured housing lender in the U.S. Department of Housing and Urban Development's (HUD) Region VII and the second largest in the nation. We focused on Title II manufactured housing loans due to the high risk that the properties had mortgages insured by the Federal Housing Administration without meeting insurance requirements.

Our objectives were to determine whether Wells Fargo originated, sponsored, or purchased manufactured housing loans that were underwritten in accordance with HUD requirements and whether insured loans met HUD permanent foundation requirements specific to Title II manufactured housing loans.

Wells Fargo did not comply with HUD regulations, procedures, and instructions when underwriting 1 of 11 Federal Housing Administration-insured loans reviewed. The loan for the property was not eligible for insurance because the property's foundation did not meet HUD requirements, and Wells Fargo did not provide HUD with all required certifications when submitting the loan for insurance. As a result, HUD insured the loan that unnecessarily placed the insurance fund at risk, causing HUD to incur a loss of $64,612.

We recommended that the Federal Housing Commissioner require Wells Fargo to reimburse HUD for the loan on which HUD incurred a loss of $64,612.

Issue Date: September 28, 2005
Audit Report No.: 2005-FW-1019
File Size: 1.44MB

Title: Wells Fargo Home Mortgage, Des Moines, IA

We reviewed Federal Housing Administration loans sponsored by Wells Fargo of Des Moines, Iowa. During an audit of a Federal Housing Administration-approved loan correspondent, we identified 11 loans sponsored by Wells Fargo that did not appear to be properly originated according to U.S. Department of Housing and Urban Development (HUD) regulations. Because the sponsor of the loans is ultimately responsible for loan processing deficiencies, we addressed these deficiencies to Wells Fargo to determine whether it complied with HUD regulations, procedures, and instructions when processing the mortgages.

Wells Fargo did not comply with HUD regulations, procedures, and instructions in the processing of 10 out of the 11 Federal Housing Administration-insured single-family mortgages we reviewed. Underwriting deficiencies included overstated income, income stability not verified, understated liabilities, creditworthiness not fully considered, unresolved inconsistencies, and insufficient or ineligible compensating factors. For nine loans, Wells Fargo did not ensure that the appraisal met HUD requirements. In addition, Wells Fargo allowed the loan correspondent to charge $11,474 in loan discount points, without reducing the borrowers' interest rates. As a result, the risk to the insurance fund was increased, four ineligible borrowers received financing, and nine borrowers incurred excessive costs for their loans.

We recommend that the Assistant Secretary for Housing - Federal Housing Commissioner take appropriate administrative action against Wells Fargo for not complying with HUD requirements. At a minimum, this should include indemnifying HUD $383,469 for case numbers 492-6765199, 491-8071128, and 491-8206149; reimbursing HUD for the $64,321 loss on case number 491-7646781; and reimbursing appropriate parties for the $11,472 in unearned fees. We further recommend that HUD ensure Wells Fargo has implemented sufficient controls to provide reasonable assurance that its underwriting complies with HUD regulations, procedures, and instructions.

Issue Date: July 16, 2004
Audit Report No.: 2004-KC-1003
File Size: 1089KB

Issue Date: September 19, 2002
Audit Report No.: 2002-KC-1003
File Size: 420KB

Title: Congressionally Requested Audit of the Outreach and Technical Assistance Grant Awarded to the Iowa Coalition for Housing and the Homeless, Des Moines, Iowa, Grant Number FFOT98009IA

We have completed an audit of the Iowa Coalition for Housing and the Homeless' Outreach and Technical Assistance Grant (OTAG) pursuant to Section 1303 of the 2002 Defense Appropriation Act (Public Law 107-117). Consistent with the Congressional directive, we reviewed the eligibility of costs with particular emphasis on identifying ineligible lobbying activities. The audit concluded the Coalition is effectively managed and well run with the exception of the method used to charge salaries to the grant. The audit identified that the Grantee over charged the grant $4,945 because the method they used to charge salaries to the grant was not proper. The Coalition agreed that the method used to allocate salary expense to the grant was not the most accurate method available to them. They said they have modified the worksheets used in their indirect cost allocation system. We made two recommendations that should correct the problem and recoup the funds overcharged to the grant.

Issue Date: September 19, 2002
Audit Report No.: 2002-KC-1003
File Size: 420KB

Title: Congressionally Requested Audit of the Outreach and Technical Assistance Grant Awarded to the Iowa Coalition for Housing and the Homeless, Des Moines, Iowa, Grant Number FFOT98009IA

We have completed an audit of the Iowa Coalition for Housing and the Homeless' Outreach and Technical Assistance Grant (OTAG) pursuant to Section 1303 of the 2002 Defense Appropriation Act (Public Law 107-117). Consistent with the Congressional directive, we reviewed the eligibility of costs with particular emphasis on identifying ineligible lobbying activities. The audit concluded the Coalition is effectively managed and well run with the exception of the method used to charge salaries to the grant. The audit identified that the Grantee over charged the grant $4,945 because the method they used to charge salaries to the grant was not proper. The Coalition agreed that the method used to allocate salary expense to the grant was not the most accurate method available to them. They said they have modified the worksheets used in their indirect cost allocation system. We made two recommendations that should correct the problem and recoup the funds overcharged to the grant.

Issue Date: June 28, 2001
Audit Report No.: 2001-KC-1802
File Size: 29KB

Title: Review of Prairie Park Apartments, Waterloo, Iowa, Project No. 074-44037

We have completed a review of the operations of Prairie Park Apartments for the period immediately prior to HUD takeover of the property. Our specific objective was to determine whether the assets of the project were sold for a fair price and whether the proceeds from the sales were used to pay for project expenses.

We determined the owners and management agent of Prairie Park Apartments violated the project’s Regulatory Agreement by selling property assets without prior written approval from HUD. However, the assets were either sold for their approximate market value or were insignificant in value, and the proceeds from the sale were used for legitimate property expenses.