The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audited Midwest Mortgage Capital (Midwest). Our audit objectives were to determine whether Midwest followed HUD requirements for underwriting loans and performing its quality control program for single-family production. We concluded that Midwest did not properly underwrite 7 of the 29 defaulted loans reviewed. These loans had material underwriting…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audited the St. Louis Housing Authority in St. Louis, Missouri. Our objective was to determine whether the Authority took complete physical inventories and maintained adequate property records. We concluded that the Authority did not perform complete physical inventories in fiscal years 2006, 2007, or 2008 or reconcile the results of the inventories…

We performed an audit of the Orchard Court project, a Section 236 multifamily property, located in Bath, Maine. As part of our audit, we reviewed subsidy payments made to Orchard Court from Bath and Brunswick, Maine, Housing Authorities (Authorities). Our objective was to determine whether Section 8 voucher program subsidies paid to Orchard Court from the Authorities were for basic rent, rather than market rent. Basic rent is the minimum rent a…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audited CitiMortgage, Incorporated (CitiMortgage). Our audit objectives were to determine whether CitiMortgage followed U.S. Department of Housing and Urban Development (HUD) requirements for underwriting loans and performing its quality control program for single-family production. We concluded that CitiMortgage did not properly underwrite 20 of the 60…

We audited the Orchard Court project, located in Bath, Maine, in response to a referral received by the Office of Inspector General's (OIG) Office of Investigation (Region 1). The referral indicated a potential inappropriate use of project funds by the Orchard Court Housing Corporation (project owner) and/or the management agent. Our overall objective was to determine whether the project owner and/or management agents operated the project…

The U.S. Department of Housing and Urban Development (HUD) Office of Inspector General reviewed the City of St. Louis' use of HOME Investment Partnerships Program (HOME) funds. Our audit objective was to determine whether the City used HOME funds for reasonable and necessary development costs. We concluded that The City used HOME funds for costs that were not reasonable and necessary to produce housing for low-income families. Additionally…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audited Heartland Funding Corporation (Heartland Funding) because of its high 30-day delinquency rate. More than 23 percent of the loans that it originated from January 2006 through December 2007 had been at least 30 days delinquent (past due). Our audit objectives were to determine whether Heartland Funding followed HUD requirements for (1) borrower…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, reviewed James B. Nutter and Company's (J.B. Nutter) quality control program. Our objective was to determine whether J.B. Nutter followed HUD's quality control requirements for home equity conversion mortgages insured by the Federal Housing Administration (FHA). We concluded that for six months in 2007 and 2008, J.B. Nutter did not meet HUD's…

We audited the HOME Investment Partnerships program (HOME) administered by the Maine State Housing Authority, Augusta, Maine (Authority), as part of our annual audit plan. The Authority received more than $21 million in U.S. Department of Housing and Urban Development (HUD) funding for its federal HOME program from 2005 to 2007. Our audit objective was to determine whether the Authority administered its HOME program in compliance with HUD…

KANSAS CITY, Mo. – A Kansas City, Mo., man who defrauded a local financial institution of $652,784.34 in funds was sentenced in federal court today for bank fraud and money laundering.Maximillian D. Howell, 44, was sentenced by U.S. District Judge Brian C. Wimes to a total of 21 months in federal prison without parole.  The court also ordered Howell to pay restitution of $231,841.84 to the financial institution.  In addition, the court…

James B. Nutter & Company, a former mortgage lender located in Kansas City, Missouri, has agreed to pay $2.4 million to resolve allegations that it violated the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act of 1989 by knowingly underwriting Home Equity Conversion Mortgages (HECM) insured by the Department of Housing and Urban Development (HUD)’s Federal Housing Administration (FHA) that did not meet…

Kelly Ballinger wrote her name on rent payments, altered renters’ incomes to steal fundsPORTLAND, Maine: A Glenburn woman pleaded guilty in U.S. District Court in Portland to embezzling from an organization receiving federal funds and conspiring to alter money orders.According to court records, Kelly Ballinger, 57, was a former property manager for a Portland apartment complex with residences funded by the Department of Housing and Urban…

Sold Stolen Rental Equipment, Real Estate He Didn’t Own KANSAS CITY, Mo. – An Independence, Mo., man was sentenced in federal court today for two fraud schemes in which he sold unwitting victims rental equipment and real estate that did not belong to him. Jeremy Ace Woods, 46, was sentenced by U.S. District Judge Howard F. Sachs to 17 years in federal prison without parole. The court also ordered Woods to pay $798,021 in restitution to 48…

BOSTON – A Maine woman pleaded guilty yesterday to stealing federal housing benefits from at least December 2004 through February 2020.  Rebecca Amelia Cranford, 63, pleaded guilty to one count of theft of government funds. U.S. District Court Chief Judge F. Dennis Saylor IV scheduled sentencing for Aug. 17, 2023. Cranford was arrested and charged in September 2021.   In the early 2000s, Cranford was engaged by the owners of a…

PORTLAND, Maine: A Berwick woman was sentenced today in U.S. District Court in Portland for Social Security fraud and theft of public money. Chief U.S. District Judge Jon D. Levy sentenced Andreanna Politano, 60, to three years of probation. She was also ordered to pay $49,976.38 in restitution to the Social Security Administration (SSA) and $9,164.00 in restitution to the U.S. Department of Housing and Urban Development (HUD).…

PORTLAND, Maine: A Berwick woman pleaded guilty today in U.S. District Court in Portland to Social Security fraud and theft of public money, U.S. Attorney Darcie N. McElwee announced. According to court records, from about March 2009 to February 2020, Andreanna Politano, 59, concealed the presence of her husband in her household to maintain her eligibility to receive Supplemental Security Income (SSI) payments. SSI benefits are paid…