“Operation FedRent” Defrauds Housing Programs

Federal employees who avoid reporting income in order to receive housing assistance are being warned by HUD that this action could risk them losing their jobs, paying large fines, or facing criminal penalties. An ongoing investigation by HUD has resulted in 34 indictments, 13 convictions, and $541,813 recovered thus far concerning this practice. This operation is titled “Operation FedRent,” and is designed as an anti-fraud program meant to expose and prosecute those aforementioned government employees. When federal employees fail to report their income in order to qualify for undeserved housing, it in turn denies and prevents eligible families from receiving housing assistance. In order to qualify for housing assistance, federal employees must rightfully fall within the guidelines used to identify all other eligible families throughout the US. According to HUD, computer matching techniques are being used to identify fraudulent income reporting.

For more information on this story, please visit http://www.hud.gov/news/release.cfm?content=pr08-002.cfm

Discrimination Complaint against Las Vegas Landlord Settled

HUD has announced a settlement with two Las Vegas landlords accused of violating the Fair Housing Act. According to HUD, the two owners of the Summer Place Apartments agreed without refute to pay $75,000 to several tenants who have been negatively impacted by discriminatory practices. In addition to payment, the settlement includes an agreement that the landlords stop all discriminatory practices against families with children, and against those with disabilities. One instance of the landlord’s discriminatory practices involved a tenant who was evicted because she had a child under the age of 18. Summer Place apartments also agreed to stop advertising their residences as an “Adult Community,” and will remain open to applicants with children.

Details about this voluntary and fully settled agreement can be read at http://www.hud.gov/news/release.cfm?content=pr08-003.cfm

2008 FHA Mortgagee Letter Issued

HUD has recently released a 2008 Mortgagee Letter, which pertains to new single family loan servicing contracts. This letter is of particular interest to single family servicing managers. According to HUD, as of December 10, 2007 a new National Loan Servicing contract has been awarded to C&L Service Corporation. The subcontractor is Morris-Griffin Corporation. These two corporations are both responsible for FHA Single Family Secretary-Held Assets, including Secretary Held Title II Mortgages, Assigned HECM Mortgages and Subordinate Mortgages, Partial Claim Subordinate Mortgages, Section 235 Subordinate Mortgages, the Good Neighbor Next Door Subordinate Mortgages, and Nehemiah Subordinate Mortgages.

For complete information on where to forward all documentation for Secretary-held mortgages, please visit http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/08-01ml.doc