oversight

Pope and Booth Closing Agent Contract, Austin, Texas

Published by the Department of Housing and Urban Development, Office of Inspector General on 2000-05-24.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                                                         Issue Date
                                                                                 May 24, 2000

                                                                         Audit Case Number
                                                                                 00-FW-222-1003




TO:           Ronald C. Bailey
              Director, Single Family Homeownership Center, 8AHH


FROM:         D. Michael Beard
              District Inspector General for Audit, 6AGA

SUBJECT: Pope & Booth Closing Agent Contract


We performed an audit of Pope & Booth’s Closing Agent contract. Our attached report contains two
findings.

Within 60 days, please furnish this office, for each recommendation in this report, a status on: (1)
corrective action taken; (2) the proposed corrective action and the date to be completed; or (3) why
action is not considered necessary. Also, please furnish us copies of any correspondence or directives
issued related to the audit.

If you have any questions, please contact Theresa A. Carroll, Assistant District Inspector General for
Audit, at (817) 978-9309.
Management Memorandum




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00-FW-222-1003           Page ii
Executive Summary
We performed an audit of the law offices of Pope & Booth, P.C. (Pope & Booth), a closing
agent for HUD, as part of a nationwide effort to review closing agents. Our audit objective
was to determine whether management controls were adequate to ensure the prevention of
fraud, waste, and abuse. To meet this objective, we performed audit steps to determine
whether the closing agent complied with its contract terms and conditions. Overall, Pope &
Booth’s controls were sufficient to ensure substantial compliance with its HUD contract.
However, we also found that Pope & Booth split title insurance fees and overcharged HUD
for wire transfer fees.




                                    Although we noted some minor exceptions, Pope & Booth
   Pope & Booth sufficiently        performed the following contractual duties adequately:
   performed some closing
   agent duties.                    •   Prepared extensions in writing and calculated the correct
                                        amount of extension fee;
                                    •   Paid only allowable expenses;
                                    •   Collected the correct fees;
                                    •   Wired correct amounts and generally conducted the wires
                                        timely;
                                    •   Calculated the correct amount for the taxing authority;
                                    •   Collected the correct closing agent fee, and
                                    •   Prepared the Warranty Deeds correctly.



 Pope & Booth split title           Even though Pope & Booth performed no additional services
 insurance fees.                    beyond those required in the closing agent contract, it received
                                    a 40 percent split of title insurance premiums from two title
                                    insurance companies. The Real Estate Settlement Procedures
                                    Act (RESPA) prohibits fee splitting and receiving unearned fees
                                    for services not actually performed. Because Pope & Booth
                                    did not perform any additional services and received a split of
                                    title insurance premiums, Pope & Booth violated RESPA.
                                    From February 1998 to June 1999, Pope & Booth received
                                    unearned fees which range between $361,886 to $454,976.

                                    Pope & Booth’s contract required it to charge HUD the actual
   Pope & Booth                     cost of wire transfer fees. For the 45 closing files reviewed,
   overcharged HUD for              Pope & Booth charged HUD $25 for each wire transfer.
   wire transfer fees.              However, Pope & Booth’s bank only charged $12. As a
                                    result, Pope & Booth overcharged HUD a total of $585 on the

                                                 Page iii                            00-FW-222-1003
Executive Summary


                           45 files. In addition, Pope & Booth may have overcharged
                           HUD on every file that it closed. Thus, Pope and Booth may
                           owe HUD an additional $28,587 for wire transfer fee
                           overcharges on the remaining 2,199 closings reported in
                           SAMS.

                           Pope & Booth did not record Special Warranty Deeds timely
   Special Warranty Deed   after closings. Pope & Booth’s contract required them to
   Not Recorded Timely.    record the deed on the day of closing or the next business day.
                           Pope & Booth recorded deeds anywhere from 1 to 96 days
                           late. However, late filing of deeds did not negatively impact
                           home buyers. Since Pope & Booth is no longer performing
                           closings for HUD, this compliance issue is not significant enough
                           to warrant a separate finding and will only be reported in this
                           summary.

                           As a result of these findings, we recommend that HUD pursue
   Recommendations.        Pope & Booth and the two title insurance companies for
                           RESPA violations. HUD should seek to recover from Pope &
                           Booth the $294,461 received from Alamo Title. HUD should
                           also determine and recover the amount Pope & Booth received
                           from American Title, which was between $67,425 to
                           $160,515. In addition, we recommend that Denver Home
                           Ownership Center require Pope & Booth to reimburse HUD
                           $585 for documented ineligible wire transfer fees. Further,
                           HUD should determine the actual number of closings performed
                           by Pope & Booth. Then, HUD should recover the amount
                           overcharged for wire fees on those closings, which could be as
                           high as $28,587.




00-FW-222-1003                  Page iv
Table of Contents

Management Memorandum                                                i


Executive Summary                                                   iii


Introduction                                                          1


Findings

1    Pope & Booth Split Title Insurance Premiums                      5



2    Pope & Booth Overcharged HUD for Wire Transfer Fees         11



Management Controls                                                   13



Appendices
     A Schedule of Questioned Costs                             15

     B Auditee Comments                                        17

     C Distribution                                            27




Abbreviations
                                   Page v                  00-FW-222-1003
Table of Contents



       CFR          Code of Federal Regulations
       HUD          U.S. Department of Housing and Urban Development
       OIG          Office of Inspector General
       RESPA        Real Estate Settlement Procedures Act
       SAMS         Single Family Asset Management System




00-FW-222-1003                     Page vi
Introduction
                                           The law office of Pope & Booth, P. C. (Pope & Booth),
    Background.                            contracted with HUD to conduct closings of HUD’s single
                                           family properties for Dallas county. Pope & Booth’s closing
                                           agent contract1 started on February 1, 1997. Pope & Booth
                                           terminated its contract with HUD on April 15, 1999.

                                           Pope & Booth had an indefinite quantity contract that provided
                                           closing services for single family properties owned by HUD.
                                           The primary objectives of the contract were to ensure that: (1)
                                           the sale of all properties closed within 60 days; (2) lenders
                                           table-funded all closings so that the funds were available to
                                           disburse at closing; (3) prompt and accurate payment of all
                                           closing costs was made; (4) net proceeds from each sale were
                                           wire transferred to HUD’s account on the day of closing or the
                                           next banking day; and (5) complete and accurate closing
                                           packages were submitted to HUD within 2 business days.

                                           To conduct a closing, Pope & Booth’s contract required them
                                           as closing agent to:

                                           •    Establish individual property files and maintain the files by
                                                FHA case number.
                                           •    Coordinate with purchaser, broker, and if appropriate,
                                                mortgagee, to establish a firm closing date on or before the
                                                date specified in the Sale Contract.
                                           •    Review title information and clear routine title issues2
                                                because clear title must be conveyed on all properties.
                                           •    Prepare a pre-closing package including a draft HUD-13,
                                                Sales Contract, Special Warranty Deed, and closing
                                                instructions from the lender to be submitted to HUD for its
                                                review.
                                           •    On the day of closing, explain all closing papers and
                                                documents to the purchaser, complete and execute the
                                                HUD-1, accept only cash or certified check, and provide a
                                                tax certificate or sufficient documentation to show taxes
                                                have been paid.



1
  Pope & Booth’s contract number was H06C97000100000.
2
  Such as past due taxes, water bills, and liens.
3
  The HUD-1 is the settlement statement used in the sale of HUD owned properties.

                                                        Page 1                                 00-FW-222-1003
Introduction


                                             •   On the day of closing or the next banking day, deposit sales
                                                 proceeds, initiate a wire transfer, and obtain the bank’s wire
                                                 transfer confirmation.
                                             •   On the day of closing or the next working day, record the
                                                 Special Warranty Deed.
                                             •   Store title documents4 that are the property of HUD in a
                                                 secure cabinet furnished by the closing agent.

                                             According to information obtained from HUD’s Single Family
                                             Asset Management System (SAMS), Pope & Booth closed
                                             2,244 properties as a closing agent from February 1, 1997, to
                                             January 31, 1999. We were unable to confirm this figure or
                                             otherwise determine the total number of sales that Pope &
                                             Booth closed due to the significant error rate in SAMS data. 5
                                             Neither HUD nor the closing agent could provide a more
                                             accurate number of the closings performed.

                                             For each closing performed, Pope & Booth received $90 from
                                             HUD. If a sale canceled, HUD paid Pope & Booth $22.50.
                                             Pope & Booth maintained three offices that conducted closings:
                                             Grand Prairie, Lewisville, and Dallas, Texas. Its main office
                                             was in Austin, Texas.

                                             Our audit objective was to determine whether management
     Audit Objectives.
                                             controls were adequate to ensure the prevention of fraud,
                                             waste, and abuse.

                                             We obtained background information by:
     Scope and Methodology.
                                             •   Reviewing the Fort Worth Single Family Office file on Pope
                                                 & Booth.
                                             •   Reviewing prior closing agent audit programs.
                                             •   Participating in a teleconference with KPMG regarding its
                                                 findings for the fiscal year 1998 FHA Financial Statement
                                                 Audit.
                                             •   Reviewing the KPMG Briefing Paper regarding the fiscal
                                                 year 1998 FHA Financial Statement Audit.

                                             To accomplish our audit objectives, we:


4
    Such as title policy and deed.
5
    Audit testing of SAMS data for the closings conducted by Pope & Booth showed that there was a 22% error rate.
    In our original sample of 50 files, 11 were improperly identified as being closed by Pope & Booth.

00-FW-222-1003                                     Page 2
                                                    Introduction



•   Examined the contract and HUD’s Property Disposition
    Handbook.
•   Obtained and tested information from SAMS.
•   Obtained from SAMS a listing of closings performed by
    Pope & Booth, from which we selected our sample of
    closings for audit testing.
•   Interviewed HUD and Pope & Booth staff at various
    offices regarding the closing process.
•   Obtained an understanding of Pope & Booth’s closing and
    accounting processes.
•   Obtained and reviewed 45 closed and 5 canceled files
    while on-site at Pope & Booth’s Grand Prairie and
    Lewisville offices. We selected files judgmentally using a
    random number generator. Because of the SAMS errors,
    the 11 files that were not closed by Pope & Booth were
    replaced by another judgmental sample while on-site. We
    tested closing files for the following contractual and HUD
    Handbook requirements:

    1.    The property closed timely and, if the property did
          not close timely, we documented the number of days
          late;
    2.    The closing file contained an extension request and
          approval, if applicable;
    3.    The correct extension fee was collected, if applicable;
    4.    Only allowable expenses were paid;
    5.    The correct fees were collected;
    6.    The sale proceeds were deposited timely;
    7.    The correct amount was wired timely;
    8.    The Deed was recorded timely;
    9.    The correct amount was collected for the taxing
          authority;
    10.   The correct amount was paid to the closing agent;
    11.   Returned funds were distributed correctly;
    12.   Clear title was issued;
    13.   The title insurance premium was not split;
    14.   A Warranty Deed was prepared;
    15.   The Warranty Deed was forwarded to HUD timely;
    16.   The selling amount on the sales contract and the
          settlement statement were identical;
    17.   Closing costs for the buyer were identical on both
          pages of the HUD-1; and

          Page 3                                  00-FW-222-1003
Introduction


                                18.   The correct amount of extension fees were on the
                                      HUD-1, if applicable.

                             We conducted the audit at Pope & Booth’s offices in Grand
   Audit Period and Sites.   Prairie, Lewisville, and Austin, Texas. The audit covered
                             closings by Pope & Booth from February 1, 1997, to January
                             31, 1999. We extended the scope of our review to include
                             payments Pope & Booth received from title companies on its
                             contract with HUD. We performed site work from February
                             1999 through March 1999. We conducted our audit in
                             accordance with generally accepted government auditing
                             standards.




00-FW-222-1003                    Page 4
                                                                                                        Finding 1



    Pope & Booth Split Title Insurance Premiums

Even though Pope & Booth performed no additional services beyond those required in the
closing agent contract, it received a 40 percent split of title insurance premiums from two title
insurance companies. The Real Estate Settlement Procedures Act (RESPA) prohibits fee
splitting and receiving unearned fees for services not actually performed. Because Pope &
Booth did not perform any additional services and received a split of title insurance premiums,
Pope & Booth violated RESPA. From February 1998 to June 1999, Pope & Booth received
unearned fees which range between $361,886 to $454,9766.




                                           Pope & Booth’s closing agent contract7 stated that the closing
    Criteria.
                                           fee paid by HUD was intended to be inclusive of all services
                                           and the preparation of all documents required by any party to
                                           the closing, including the lender. Further, the contract
                                           prohibited Pope & Booth from collecting any fees for services
                                           or documents required under the contract above and beyond
                                           HUD’s established closing fee.

                                           The RESPA is a consumer protection statute that was first
                                           passed in 1974. One of its purposes is to eliminate kickbacks
                                           and referral fees that increase unnecessarily the costs of certain
                                           settlement services. The RESPA section titled--Prohibition
                                           against kickbacks and unearned fees -- states in part (c) “No
                                           person shall give and no person shall accept any portion, split,
                                           or percentage of any charge made or received for the rendering
                                           of a settlement service in connection with a transaction involving
                                           a federally related mortgage loan other than for services actually
                                           performed. A charge by a person for which no or nominal
                                           services are performed or for which duplicative fees are
                                           charged is an unearned fee and violates this section.8” Simply
                                           put, RESPA prohibits fee splitting and receiving unearned fees
                                           for services not actually performed.




6
  Because of the time it takes to process payments, Pope & Booth received payments form Alamo Title until June
1999.
7
  Section B.5.
8
  Title 24 CFR 3500.14.

                                                        Page 5                                    00-FW-222-1003
Finding 1




                                               In 49 percent of the closing files reviewed9, Pope & Booth
      Pope & Booth received a
                                               received a 40 percent split of the premiums from two title
      percentage of the title
                                               companies that provided title insurance to lenders and/or
      insurance premiums.
                                               homeowners. In each of the 22 cases, either the title
                                               commitment or the title company invoice documented that Pope
                                               & Booth would receive 40 percent of the title premium.
                                               Further audit work revealed that Pope & Booth had written
                                               agreements to split title insurance premiums with two title
                                               companies: American Title and Alamo Title.

                                               Pope & Booth’s agreements with the two title companies
      Title company
                                               consisted of duties that duplicated the work that HUD required
      agreements duplicate
                                               of its closing agents. Specifically, Pope & Booth’s tasks under
      work required in closing
                                               the title company agreements included:
      agent contract.
                                               •   performing closings in compliance with the terms and
                                                   conditions of the sales contract;
                                               •   closing in accordance with normal legal and business
                                                   practices;
                                               •   closing in strict compliance with the title commitment terms
                                                   and requirements;
                                               •   disbursing consideration and proceeds through Pope &
                                                   Booth’s escrow account properly;
                                               •   recording documents properly or delivering the documents
                                                   and recording fees to the title company for recording; and
                                               •   reviewing the title commitment provided and clearing any
                                                   exceptions.

                                               All of these tasks were also required by Pope & Booth’s
                                               closing agent contract with HUD. In addition, HUD’s contract
                                               specifically prohibited Pope & Booth from collecting any
                                               additional fees for services or documents already required as
                                               part of the closing agent contract.

                                               Pope & Booth performed no additional work for the title
      Pope & Booth performed
                                               companies beyond what was required of a HUD closing agent.
      no additional work for the
                                               Yet, the two title companies paid Pope & Booth 40 percent of
      title company fee.
                                               the title premium. RESPA considers such payments to be
                                               unearned fees. HUD’s closing agent contract allowed

9
    22 out of the 45 closing files reviewed.

00-FW-222-1003                                       Page 6
                                                                                                          Finding 1


                                              additional compensation for services other than closing
                                              activities. Yet, Pope & Booth performed no additional duties
                                              that were outside the scope of its HUD contract. Thus, HUD
                                              and the title companies paid Pope & Booth for performing the
                                              same services.

                                              Additional audit work was performed to determine the amount
                                              Pope & Booth received as part of the fee splitting arrangements
                                              with the two title companies. Both title companies were issued
                                              subpoenas to obtain payment information.

                                              In response to the subpoena, Alamo Title provided check
      $294,461 paid by Alamo
                                              registers and other supporting information for payments to Pope
      Title to Pope & Booth.
                                              & Booth. Based on the information provided, Alamo made
                                              payments to Pope & Booth from February 1998 to June 4,
                                              1999. During that time period, Alamo Title’s records showed
                                              that Pope & Booth was paid $294,461 for insurance premiums
                                              paid for by purchasers or HUD.

                                              American Title could not provide the total amount that it paid
                                              Pope & Booth. American Title provided database records that
                                              indicated that HUD was a party to 435 closings for properties
                                              in the Dallas county area.10 American Title did not provide the
                                              amount of fees paid to Pope & Booth for each of these 435
                                              properties. However, they did provide the amount of title
                                              insurance premiums paid to Pope & Booth for seven properties
                                              identified during audit testing. American Title paid Pope &
                                              Booth $2,360 for these seven properties. The amounts paid
                                              ranged from $155 to $369 per property. Thus for the 435
                                              closings, Pope & Booth could have potentially received from
                                              $67,425 to $160,515 in unearned fees from American Title.

                                              In discussions with its management, Pope & Booth
      Pope & Booth
                                              acknowledged that the title companies paid it a percentage of
      acknowledged receiving a
                                              the title insurance premium. However, Pope & Booth
      percentage of title
                                              management offered no explanation for the allowability of this
      premium.
                                              practice.




10
     Since Pope & Booth was the only closing agent for HUD in Dallas county that had an agreement with American
     Title, we concluded that Pope & Booth was the closing agent for all 435 properties. Thus, Pope and Booth would
     have received 40% of the title insurance premium from American title for all 435 properties.

                                                         Page 7                                      00-FW-222-1003
Finding 1




                        American Title responded that because American Title
   Auditee Comments     complied with the rules and regulations of the Texas Insurance
                        Code it did not violate RESPA. Further, because American
                        Title complied with the Texas Insurance Code no RESPA
                        violation occurred.

                        Alamo Title responded that Alamo Title entered into a standard
                        contract with Pope & Booth for closing services rendered on
                        Alamo Title’s behalf and complied with the rules and regulations
                        of the Texas Insurance Code. Additionally, Alamo Title stated
                        that Pope & Booth received duplicative fees for performance of
                        the same services, one from HUD and one from Alamo.
                        Further, Alamo Title stated that Pope & Booth should either
                        reimburse HUD or Alamo the amount it was overpaid.
                        However, Alamo Title stated that it is not responsible to HUD
                        for any overpayments that Pope & Booth received.




                        Based on our evaluation of American Title and Alamo Title’s
    OIG Evaluation of   responses, the raising of the issue of Texas Insurance law versus
    Comments            Federal RESPA law is unfounded. If it were, Federal law
                        would prevail, but the two are not at odds. Both title
                        companies are raising Texas Insurance Code because they
                        believe that the report states that title companies cannot pay a
                        closing agent for closing services. The audit report does not
                        state that. Texas law does allow title companies to pay for
                        closing services. However, what the audit found was that the
                        closing fees were indeed duplicative and thus, the title
                        companies were paying something for nothing.




    Recommendations     We recommend that the Director, Denver Homeownership
                        Center:

                        1A. Pursue Pope & Booth and/or Alamo Title for the RESPA
                            violations and recover $294,461 in questioned unearned
                            fees.

00-FW-222-1003                Page 8
                                                 Finding 1



1B. Require Pope & Booth to research and report the amount
    of payments that it received from American Title for
    closing performed under the HUD contract.

1C. Pursue Pope & Booth and/or American Title for the
    RESPA violations and recover the questioned unearned
    fees of $67,425 to $160,515.




        Page 9                               00-FW-222-1003
Finding 1




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00-FW-222-1003      Page 10
                                                                                                       Finding 2



          Pope & Booth Overcharged HUD for Wire
                       Transfer Fees

Pope & Booth overcharged HUD to wire transfer the proceeds from sales that it closed for
HUD. Pope & Booth’s contract required it to charge HUD the actual cost of the wire transfer
fee. For each of the 45 closing files reviewed, Pope & Booth charged $25 for a wire transfer.
However, Pope & Booth’s bank only charged $12. As a result, Pope & Booth overcharged
HUD $585 on the 45 files reviewed. In addition, Pope & Booth may have overcharged HUD
on every file that it closed. Thus, Pope and Booth may owe HUD an additional $28,587 for
wire transfer fee overcharges on the remaining 2,199 closings reported in SAMS.11




                                              The closing agent contract12 required Pope & Booth to “charge
      Criteria.
                                              the actual cost of the wire transfer of sales proceeds to HUD
                                              and include it with settlement charges to the seller ... and deduct
                                              the cost from the sales proceeds due HUD.” In addition, Pope
                                              & Booth was required to review settlement statements prior to
                                              closing and certify that the information and costs they contained
                                              were correct.

                                              For each of the 45 files reviewed, Pope & Booth charged HUD
      Testing showed Pope &
                                              $25 on the settlement statement to wire the sales proceeds to
      Booth overcharged for
                                              HUD. According to its contract, Pope & Booth was to charge
      wire transfer fees.
                                              HUD its actual costs for wire transfer fees. However, Pope &
                                              Booth’s bank only charged $12 for an outgoing wire transfer.
                                              Thus, Pope & Booth overcharged HUD $13 per wire transfer
                                              for a total overcharge of $585 for the 45 loans reviewed.

                                              Management of Pope & Booth asserted that it had information
      Pope & Booth stated wire
                                              that the cost of the wire transfer fee was $25 and that the cost
      fee used to be $25.
                                              decreased without their knowledge. However, Pope & Booth
                                              did not provide documentation to support these statements.
                                              Further, a brochure from its bank listed the cost of outgoing
                                              non-repetitive wire transfer fees at $12. The brochure shows
                                              that the stated fees were effective on October 31, 1997.


11
     See Introduction and footnote 5 concerning SAMS data errors and error rate.
12
     Section B.9.c.

                                                          Page 11                                 00-FW-222-1003
Finding 2


                           Since Pope & Booth overcharged HUD on each of the 45 files
   Pope & Booth may have
                           reviewed and those files closed anywhere from April 1997 to
   overcharged on every
                           January 1999, it probably overcharged HUD on every sale it
   sale it closed.
                           closed. According to SAMS data for the period February
                           1997 to January 1999, Pope & Booth closed 2,244 properties.
                           Thus, Pope & Booth may have overcharged HUD $28,587 on
                           the 2,199 closings that were not reviewed.




                           No comments were received on Finding 2.
   Auditee Comments




   Recommendations         We recommend that the Director, Denver Homeownership
                           Center:

                           2A. Require Pope & Booth to reimburse HUD $585 for
                               ineligible wire transfer fees on the 45 files reviewed.

                           2B. Determine the number of sales closed by Pope & Booth
                               as part of its closing agent contract with HUD.

                           2C. Require Pope & Booth to reimburse HUD for any
                               additional ineligible wire transfer fees on any other HUD
                               closings, which could potentially amount to $28,587.




00-FW-222-1003                   Page 12
Management Controls

In planning and performing our audit, we obtained an understanding of the management
controls that were relevant to our audit. Management is responsible for establishing effective
management controls. Management controls, in its broadest sense, include the plan of
organization, methods, and procedures adopted by management to ensure that its goals are
met. Management controls include the processes for planning, organizing, directing, and
controlling program operations. They include the systems for measuring, reporting, and
monitoring program performance.


                                    We determined the following management controls were
   Relevant Management              relevant to our audit objectives:
   Controls.
                                    •   Policies and procedures of the sales process at HUD.
                                    •   Administrative controls to ensure that accurate data is input
                                        from the settlement statement into the Single Family Asset
                                        Management System.
                                    •   Policies and procedures of the cash receipts and
                                        disbursements controls at the closing agent.
                                    •   Administrative controls to ensure the closing documents
                                        were kept secure.

                                    A significant weakness exists if management controls do not
                                    give reasonable assurance that resource use is consistent with
   Significant Weakness.            laws, regulations, and policies; that resources are safeguarded
                                    against waste, loss, and misuse; and that reliable data are
                                    obtained, maintained, and fairly disclosed in reports. Based on
                                    our review, we believe the following item is a significant
                                    weakness as discussed in this report:

                                    Pope & Booth split the title insurance premium based on a
                                    percentage of the total amount (Finding 1).




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Management Controls




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00-FW-222-1003          Page 14
                                                                                                     Appendix A


Schedule of Questioned Costs


                                                                           Type of Questioned Costs
          Issue                                                            Ineligible 1/ Unsupported 2/


1A Questioned unearned fees                                                                     $294,461

1C Questioned unearned fees                                                                       $67,425

2A Ineligible wire transfer fees                                                $585

2C Additional wire transfer fees                                                                  $28,587




1
    Ineligible costs are costs charged to a HUD-financed or insured program or activity that the auditor believes are
    not allowable by law, contract, or federal, state, or local policies or regulations.
2
    Unsupported costs are costs questioned by the auditor because the eligibility cannot be determined at the time of
    audit. The costs are not supported by adequate documentation or there is a need for a legal or administrative
    determination on the eligibility of the costs. Unsupported costs require a future decision by HUD program




                                                           Page 15                                      00-FW-222-1003
Appendix A

 officials. This decision, in addition to obtaining supporting documentation, might involve a legal interpretation or
 clarification of Departmental policies and procedures.




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00-FW-222-1003                                     Page 16
                               Appendix B

Auditee Comments




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Appendix B




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            Appendix B




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            Appendix B




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            Appendix B




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            Appendix B




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00-FW-222-1003   Page 26
            Appendix B




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                                                                                      Appendix C

Distribution
Secretary's Representative, 6AS
Comptroller, 6AF
Director, Accounting, 6AAF
Director, Single Family Homeownership Center, 8AHH
Saul N. Ramirez, Jr., Deputy Secretary, SD (Room 10100)
Kevin Simpson, Deputy General Counsel, CB (Room 10214)
Jon Cowan, Chief of Staff, S (Room 10000)
B. J. Thornberry, Special Asst. to the Deputy Secretary for Project Management, SD (Rm 10100)
Joseph Smith, Acting Assistant Secretary for Administration, A (Room 10110)
Hal C. DeCell III, A/S for Congressional and Intergovernmental Relations, J (Room 10120)
Ginny Terzano, Sr. Advisor to the Secretary, Office of Public Affairs, S (Room 10132)
Roger Chiang, Director of Scheduling and Advance, AL (Room 10158)
Howard Glaser, Counselor to the Secretary, S (Room 10218)
Rhoda Glickman, Deputy Chief of Staff, S (Room 10226)
Todd Howe, Deputy Chief of Staff for Operations, S (Room 10226)
Jacquie Lawing, Deputy Chief of Staff for Programs & Policy, S (Room 10226)
Patricia Enright, Deputy A/S for Public Affairs, W (Room 10222)
Joseph Hacala, Special Asst for Inter-Faith Community Outreach, S (Room 10222)
Marcella Belt, Executive Officer for Admin Operations and Management, S (Room 10220)
Karen Hinton, Sr. Advisor to the Secretary for Pine Ridge Project (Room 10216)
Gail W. Laster, General Counsel, C (Room 10214)
Armando Falcon, Office of Federal Housing Enterprise Oversight (Room 9100)
William Apgar, Assistant Secretary for Housing/FHA, H (Room 9100)
Susan Wachter, Office of Policy Development and Research (Room 8100)
Cardell Cooper, Assistant Secretary for CPD, D (Room 7100)
George S. Anderson, Office of Ginnie Mae, T (Room 6100)
Eva Plaza, Assistant Secretary for FHEO, E (Room 5100)
V. Stephen Carberry, Chief Procurement Officer, N (Room 5184)
Harold Lucas, Assistant Secretary for Public & Indian Housing, P (Room 4100)
Gloria R. Parker, Chief Information Officer, Q (Room 8206, L’Enfant Plaza)
Frank L. Davis, Director, Office of Dept Operations and Coordination, I (Room 2124)
Office of the Chief Financial Officer, F (Room 2202)
Edward Kraus, Director, Enforcement Center, V, 200 Portals Bldg., Wash. D.C. 20024
Donald J. LaVoy, Acting Director, REAC, X, 800 Portals Bldg., Wash. D.C. 20024
Ira Peppercorn, Director, Office of MF Asst Restructuring, Y, 4000 Portals Bldg., D.C. 20024
Mary Madden, Assistant Deputy Secretary for Field Policy & Mgmt, SDF (Room 7108) (2)
Deputy Chief Financial Officer for Operations, FF (Room 2202)
David Gibbons, Director, Office of Budget, FO (Room 3270)
Rebecca J. Holtz, Housing Program Officer, HUCI (Room 9146)
FTW ALO, 6AF (2)
Denver ALO, 8AF

                                               Page 28                              00-FW-222-1003
                                                                                        Appendix B


Housing ALO, HF (Room 9116) (2)
Dept. ALO, FM (Room 2206) (2)
Acquisitions Librarian, Library, AS (Room 8141)

                                   DISTRIBUTION (Cont’d)

Director, Hsg. & Comm. Devel. Issues, US GAO, 441 G St. NW, Room 2474
      Washington, DC 20548 Attn: Judy England-Joseph
Henry A. Waxman, Ranking Member, Committee on Govt Reform,
      House of Rep., Washington, D.C. 20515
The Honorable Fred Thompson, Chairman, Committee on Govt Affairs,
      U.S. Senate, Washington, D.C. 20510
The Honorable Joseph Lieberman, Ranking Member, Committee on Govt Affairs,
      U.S. Senate, Washington, D.C. 20510
Cindy Fogleman, Subcomm. on Gen. Oversight & Invest., Room 212,
      O'Neill House Ofc. Bldg., Washington, D.C. 20515
The Honorable Dan Burton, Chairman, Committee on Govt Reform,
      House of Representatives, Washington, D.C. 20515
Deputy Staff Director, Counsel, Subcommittee on Criminal Justice, Drug Policy & Human
      Resources, B373 Rayburn House Ofc. Bldg., Washington, D.C. 20515
Steve Redburn, Chief, Housing Branch, Office of Management and Budget
      725 17th Street, NW, Room 9226, New Exec. Ofc. Bldg., Washington, D.C. 20503
Inspector General, G
Pope & Booth, P.C.
Alamo Title Company
American Title Company




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