We recommend that the Director of the Office of Disaster Recovery require the State to implement policies and procedures that require maintaining documentation to ensure it can support compliance for the installation of 36-inch roof valley flashing.

We recommend that the Director of the Office of Disaster Recovery require the State to determine if the proper roof valley flashing was installed on the completed and in progress homes, and if not, require the State to install the correct roof valley flashing using non-Federal funds.

We recommend that the Director of the Office of Disaster Recovery require the State to enhance the system used to estimate costs, to include the Wildland-Urban Interface Code required roof valley flashing, or document in the system and its output the different materials and costs used.

We recommend that the Director of the Office of Disaster Recovery require the State to develop and implement a policy to identify ownership and primary residency earlier in the review process and potential red flags in documentation.

We recommend that the Director of the Office of Disaster Recovery require the State to document and support its decision regarding duplication of benefits and income verification for additional owners of the property under an application.

Review the loans in our sample that did not receive appropriate loss mitigation options to ensure that the borrowers were remedied by the servicers, when possible, and take administrative actions if appropriate.

Engage with the servicers in our sample to determine reasons for noncompliance and develop a plan to mitigate it going forward.

Update HUD’s FHA FAQs to clarify current loss mitigation requirements and ensure that outdated guidance is removed.

Design and implement a data-driven methodology to determine the appropriate mix of origination and servicing monitoring and desk reviews.

Review the sampled loans for which borrowers did not receive appropriate loss mitigation options to ensure that the borrowers were remedied by Nationstar, if possible, and take administrative actions if appropriate.

Implement controls and provide employee training to help prevent noncompliance in loss mitigation.

Update and implement controls to the Nationstar internal system to ensure the correct application of COVID-19 partial claims.

Identify loans with COVID-19 recovery partial claims that were affected by the improper application of partial claims funds and update the accounts.

Identify FHA borrowers who received a non-HUD-approved loss mitigation option and ensure that the borrowers receive an updated approved HUD loss mitigation option.

Update the servicing script to include information related to the HAF program, identify borrowers who may benefit from HAF, and conduct outreach to these borrowers.

We recommend that the Deputy Assistant Secretary instruct the Virgin Islands Housing Finance Authority to develop and implement procedures, including financial controls, to enhance its tracking of payments made with CDBG-DR funds and payments made with FEMA funds to ensure that payments are not made for the same invoices, match requirements are not exceeded before closeout, and a thorough review is conducted for award increases and cost reasonableness.

We recommend that the Deputy Assistant Secretary instruct the Virgin Islands Housing Finance Authority to enforce its subrecipient agreement requirement to submit monthly status reports.

We recommend that the Deputy Assistant Secretary instruct the Virgin Islands Housing Finance Authority to develop and implement procedures to ensure that all Match Program activities are monitored, and guidance is provided to its Match Program recipients.

We recommend that the Deputy Assistant Secretary instruct the Virgin Islands Housing Finance Authority to develop and implement detailed policies and procedures to guide staff in reporting performance outcomes in the QPR and on its disaster recovery website.

We recommend that the Deputy Assistant Secretary instruct the Virgin Islands Housing Finance Authority to revise its policies and procedures to include requirements to document its basis for activities’ meeting the national objective, including the rationale for the service area used and a list of acceptable documents to support that the area was primarily residential for the low- and moderate- income area benefit national objective.