FHA Exam Readiness

An FHA lender requested branch audits of several sites operated by one of the client’s affiliates. This review was in anticipation of an upcoming FHA audit. We performed detailed file reviews of 31 FHA loans and assigned two consultants to perform the onsite branch audits which entailed a review of regulatory compliance, including adherence to HUD departmental rules and regulations, and company policies, procedures and regulations. Many of our findings related to documentation errors and inconsistencies, indicating that adequate quality control—both prefunding and post-closing— were not present. We assisted the client in updating its quality control plan, making sure that thorough prefunding and post-closing quality control procedures were put in place.