OIG: Bank of America Reverse Mortgage Servicing Operation Out of Compliance

image The Office of the Inspector General for the U. S. Department of Housing and Urban Development’s (HUD) reviewed Bank of America’s home equity conversion mortgage (HECM) servicing division in Seattle, Washington and found that the servicer did not comply with two HUD requirements in its administration of HECM loans.

According to the report, Bank of America did not maintain annual certifications of residency and did not notify HUD in a timely manner of the due and payable status of the mortgages of deceased borrowers.

The OIG says that both weaknesses could result in the properties remaining vacant longer, increased property deterioration, the need for additional maintenance, and potential decline in property value.

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Bank of America respectfully disagrees with several of the OIG’s findings and provides responses in the report which you can read at the link below.

Report 2009-FW-1013

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  • Doesn't the OIG have anything better to do than “play gotcha” with one of HUD's long-time business partners? B of A's written response lays out all of the flaws in the audit but, much like a correction to an erroneous headline that causes extensive damage, the response will never get the same attention as the headline.

    OIG's showcase of these pittances of issues in the media is just flat out wrong.

  • Gov did not have a problem with B of A when they forced them to buy Merril Lynch which nearly bankrupted B of A.
    Now, they want to put information out there that could
    cause problems for a top performing reverse mortgage lender.

  • Gov did not have a problem with B of A when they forced them to buy Merril Lynch which nearly bankrupted B of A.rnNow, they want to put information out there that could rncause problems for a top performing reverse mortgage lender.

  • The auditors need to do their thing, which is actually an important function, and they almost always find something. The audited company typically issues a response. I haven't seen the report, but based on this article the findings sound easily correctible. It shouldn't have much impact on BofA's RM business.

  • We’re getting a bit tired of the same toon from all forms of media these days. They sensationalize everything to the point that everyone is suspect or guilty of something or other. I would suggest we all ignore it for a while and get on with the business of helping seniors into a more comfortable retirement. We all understand the need for regulations in our industry, but the constant scrutiny and then over blown commentary from the media is getting extremely old!

  • The auditors need to do their thing, which is actually an important function, and they almost always find something. The audited company typically issues a response. I haven’t seen the report, but based on this article the findings sound easily correctible. It shouldn’t have much impact on BofA’s RM business.

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