HUD Paid $1B For Incorrect Mortgage Claims, Report Says

Law360, New York (September 20, 2012, 9:29 PM EDT) -- The U.S. Department of Housing and Urban Development paid more than $1 billion for nearly 12,000 “preforeclosure” sale claims that didn't meet a preforeclosure program's requirements, the agency's auditor said in a report released Tuesday.

According to the HUD Office of Inspector General's report, an estimated 11,693 of nearly 17,000 claims submitted by the nine largest lenders in the Federal Housing Administration's preforeclosure sale program and paid out by HUD didn't comply with program criteria.

“HUD did not have adequate controls to enforce the program requirements,...
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