oversight

National Home Management Solutions, Independence, OH, Did Not Fully Comply With HUD's Requirements for the Management and Marketing of HUD Real Estate-Owned Properties

Published by the Department of Housing and Urban Development, Office of Inspector General on 2010-07-22.

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

                                                                                 Issue Date
                                                                                          July 22, 2010
                                                                                 
                                                                                 Audit Report Number:
                                                                                          2010-CH-1009




TO:               Vicki B. Bott, Deputy Assistant Secretary for Single Family Housing, HU


FROM:             Heath Wolfe, Regional Inspector General for Audit, 5AGA

SUBJECT: National Home Management Solutions, Independence, OH, Did Not Fully
           Comply With HUD’s Requirements for the Management and Marketing of
           HUD Real Estate-Owned Properties

                                               HIGHLIGHTS

    What We Audited and Why

                    We audited National Home Management Solutions (National Home), the U.S.
                    Department of Housing and Urban Development’s (HUD) management and
                    marketing contractor for HUD real estate-owned properties in Ohio. We selected
                    National Home based on a citizen’s complaint received by our office. Our
                    objective was to determine whether National Home complied with HUD’s
                    requirements regarding the sale of HUD single-family real estate-owned
                    properties (HUD homes). The audit was part of the activities in our fiscal year
                    2009 annual audit plan.

    What We Found

                    National Home did not fully comply with its HUD contract and HUD’s
                    requirements regarding the sale of HUD homes. It did not always notify backup
                    bidders1 when the winning bidders failed to provide executed sales contracts and/or
                    accept prospective buyers’ preliminary bids to purchase HUD homes in a timely
                    manner.

1
    Backup bidders are eligible buyers that submitted the second highest bids/offers for the purchase of HUD homes.
           National Home also did not maintain adequate documentation to support (1) its
           reanalysis for homes that did not sell within the first 45 days of market exposure
           or (2) its rationale for accepting bids that were below HUD’s minimum acceptable
           bid amounts and/or did not result in the highest net returns to HUD. As a result,
           HUD lacked assurance that National Home represented HUD’s best interest in the
           management and marketing of its homes and maximized the net returns to the
           Federal Housing Administration insurance fund.

           Further, we reviewed 10 HUD homes that were the subject of the complainant’s
           allegations regarding National Home’s awarding of the homes to buyers that did
           not submit the highest bids. National Home received approval from HUD to
           award the homes when the winning bid amounts were below HUD’s minimum
           acceptable bid amounts at the time the homes were listed on the market for sale or
           did not result in the highest net returns to HUD. However, National Home did not
           maintain documentation of its rationale for accepting the bids for 2 of the 10
           homes as required under its HUD contract.

What We Recommend


           We recommend that the Deputy Assistant Secretary for Single Family Housing
           require National Home to provide documentation showing that HUD approved the
           acceptance of the bids and the rationale for why acceptance of such bids would be
           in HUD’s best interest, as required under its contract, or reimburse HUD $36,455
           from non-Federal funds for the losses HUD incurred on the five properties. We
           also recommend that the Deputy Assistant Secretary require National Home to
           implement adequate procedures and controls to ensure compliance with its HUD
           contract, including but not limited to maintaining documentation to support its (1)
           rationale for approving bids below HUD’s minimum acceptable bid amounts or
           bids that do not result in the highest net return to HUD, (2) analyses of homes that
           have been on the market in excess of 45 days, and (3) notification of backup
           bidders in accordance with its HUD contract.

           For each recommendation without a management decision, please respond and
           provide status reports in accordance with HUD Handbook 2000.06, REV-3.
           Please furnish us copies of any correspondence or directives issued because of the
           audit.

Auditee’s Response


           We provided the results of our review to National Home during the audit. We
           also provided our discussion draft audit report to National Home’s engagement
           manager and HUD’s staff during the audit. We conducted an exit conference with
           National Home’s engagement manager on June 21, 2010.




                                            2
We asked National Home’s engagement manager to provide written comments on
our discussion draft audit report by June 17, 2010. National Home’s engagement
manager provided written comments to the discussion draft report, dated June 23,
2010. The engagement manager disagreed with our finding and
recommendations. The complete text of the written comments, except for 175
pages of documentation that were not necessary to understand the engagement
manager’s comments, along with our evaluation of that response, can be found in
appendix B of this report. We provided HUD’s Deputy Assistant Secretary for
Single Family Housing with a complete copy of National Home’s written
comments plus the 175 pages of documentation.




                                3
                           TABLE OF CONTENTS

Background and Objective                                                         5

Results of Audit
       Finding: National Home Did Not Fully Comply With Its Contract and HUD’s
                 Requirements for Sales of HUD Homes                              6

Scope and Methodology                                                            10

Internal Controls                                                                11

Appendixes
   A. Schedule of Questioned Costs                                               13
   B. Auditee Comments and OIG’s Evaluation                                      14
   C. Federal and Contract Requirements                                          18
   D. Summary of Management and Marketing Deficiencies Using HUD’s
       Requirements                                                              19




                                           4
                          BACKGROUND AND OBJECTIVE

The Federal Housing Administration (FHA) administers the single-family mortgage program.
Upon default and foreclosure of an insured mortgage loan, the lender files a claim for insurance
benefits. In exchange for payment of the claim, the lender conveys the foreclosed-upon property to
the U.S. Department of Housing and Urban Development (HUD). The property is then deemed a
HUD real estate-owned property. HUD, through marketing and management contractors, manages
and initiates the sale of these single-family homes (HUD homes) under its Single Family Property
Disposition Program (program). The purpose of the program is to reduce HUD’s inventory of
acquired properties in a manner that expands homeownership, strengthens neighborhoods and
communities, and ensures a maximum net return to the mortgage insurance fund.

The majority of HUD homes that are sold through the program are listed for sale and sold on a
competitive sale basis, although preference in bidding priority and discounted sales prices may
be available to owner-occupant bidders in support of HUD’s mission to expand affordable
housing opportunities. There are two stages in the competitive sale process: exclusive listing
and extended listing. During the exclusive listing period, the homes are listed on the marketing
and management contractor’s Internet Web site for a period of 10 calendar days, during which
time only bids received from individual purchasers who intend to occupy the property as their
primary residence, qualified nonprofit organizations, and government entities may be submitted.
During the extended listing period, the homes are offered for sale to all classes of bidders.

National Home Management Solutions (National Home), a limited liability corporation (a joint
venture between Prescient, Inc., and Home Mortgage Solutions), was incorporated in the State of
Florida in 1999. In August 2004, HUD contracted with National Home to monitor lender
compliance, market and manage HUD’s single-family real estate-owned properties, and oversee
the sales closing activity in New York and New Jersey. In 2008, HUD amended National
Home’s contract to include the State of Ohio. National Home’s Ohio office is located at 2
Summit Park Drive, Independence, OH.

Our audit objective was to determine whether National Home complied with HUD’s
requirements regarding the sale of HUD single-family real estate-owned homes in Ohio. This
review also addressed a compliant to our office regarding the awarding of HUD homes to buyers
that did not submit the highest bids. The complaintant also alledged that a specific broker was
receiving privileged information from National Home.




                                                5
                                       RESULTS OF AUDIT

Finding: National Home Did Not Fully Comply With Its Contract and
              HUD’s Requirements for Sales of HUD Homes
National Home did not fully comply with its contract and HUD’s requirements for sales of HUD
homes. It did not always notify backup bidders when winning bidders failed to provide executed
sales contracts and/or accept prospective buyers’ offers to purchase a HUD home in a timely
manner. Further, National Home did not maintain sufficient documentation to support (1) its
reanalysis for homes that did not sell within the first 45 days of market exposure or (2) its rationale
for accepting bids below HUD’s minimum acceptable bid amounts or bids that did not result in the
highest net returns to HUD. These problems occurred because National Home lacked adequate
procedures and controls to ensure that it complied with its HUD contract and HUD’s requirements.
As a result, HUD lacked assurance that National Home represented HUD’s best interest and
maximized the net returns to the FHA insurance fund.



 National Home Did Not Fully
 Comply With Its Contract

                Using HUD’s systems and National Home’s data, we determined that 9,169 HUD
                homes received bids for purchase from prospective buyers during our audit period of
                March 8, 2008, through May 31, 2009. Of the 9,169 homes, 1,148 homes received
                five or more bids. We randomly selected 72 of the 1,148 homes to review buyers’
                bids to determine whether the awarded bids were selected in accordance with
                HUD’s requirements and the bid amounts maximized the net returns to HUD.

                For the 72 home sales reviewed, 10 sales (14 percent) did not comply with HUD’s
                requirements as follows:

                   For 9 home sales, National Home did not notify backup bidders when bidders
                    that were awarded the HUD homes failed to provide executed sales contracts
                    in a timely manner. According to its HUD contract, if an executed sales
                    contract is not received within 2 business days, National Home shall notify the
                    backup bidders, if any, that they have 2 business days in which to submit a
                    fully executed sales contract or the property will be reoffered for sale. The
                    number of days National Home allowed the awarded bidders to provide the
                    required executed sales contracts ranged from 1 to 13 business days in excess
                    of the 2 business day requirement (see appendix C, National Home contract,
                    section 5.4.3.6).

                   For one property, the awarded bidder’s bid amount did not result in the
                    highest net return to HUD. The bid was $8,455 less than the highest bid


                                                   6
                     amount. According to its HUD contract, National Home shall accept the bid
                     that results in the greatest net return for HUD (see appendix C, National
                     Home’s contract, section 5.4.2.1.1.2).

    National Home Did Not Always
    Efficiently and Effectively
    Manage and Market HUD
    Homes

                Using HUD’s Single Family Data Warehouse system, we identified 10,134 homes
                that were managed and marketed by National Home during our audit period of
                March 8, 2008, through May 31, 2009. Of the 10,134 homes, we selected 109 to
                review regarding the marketing and sales of the homes.

                Of the 109 homes, 19 (17 percent) did not fully comply with HUD’s requirements
                for the sale of HUD homes as follows:

                    For one home, National Home did not record the acceptance of the sales offer
                     in a timely manner. It recorded the acceptance of the preliminary offer in
                     HUD’s Single Family Asset Management system2, which allowed the home to
                     be moved off the sales listing. However, it did not accept the sales offer until
                     12 days after the preliminary offer was recorded. According to HUD, a home
                     should remain in the preliminary offer stage no longer than 7 calendar days
                     (see appendix C, Single Family Asset Management User’s Guide Ver.5.1).

                    For 17 homes, the winning bidders did not submit executed sales contracts to
                     National Home in a timely manner. Further, National Home did not notify the
                     backup bidders. According to its HUD contract, if an executed sales contract
                     is not received within 2 business days, National Home shall notify the backup
                     bidders, if any, that they have 2 business days in which to submit a fully
                     executed sales contract or the property will be reoffered for sale. However,
                     National Home executed the sales contracts with the winning bidders 1 to 7
                     calendar days after the required notification period (see appendix C, National
                     Home’s contract, section 5.4.3.6).

                    National Home awarded one home to a bidder that submitted a bid amount
                     $2,000 below HUD’s minimum acceptable bid amount of $126,000 at the
                     time the home was on listed on the market for sale. According to its HUD
                     contract, National Home shall accept the bid that results in the greatest net
                     offer for HUD. If all bids received are unacceptable, National Home shall
                     request concurrence from HUD to accept a bid that is less than the minimum
                     acceptable bid and document in its electronic management system the

2
  Single Family Asset Management system (SAMS) is HUD’s system that tracks acquired single-family properties
from acquisition via foreclosure to resale.



                                                      7
              rationale for why acceptance of such a bid would be in HUD’s best interest.
              National Home did not provide documentation showing that it requested
              approval from HUD to accept the bid or document in its electronic
              management system the rationale for accepting the bid (see appendix C,
              National Home’s contract, sections 5.4.1.8 and 5.4.2.1.1.2).

             For six homes that were on the market for more than 45 days, National Home
              did not maintain adequate documentation of its reanalysis. For two homes, it
              reduced the homes’ listing price by 10 percent within 35-36 days of market
              exposure, and for another home it did not reanalyze the home until it had been
              on the market for 49 days. According to HUD Handbook 4310.5, properties
              not sold within the first 30 to 45 days must be reanalyzed to determine why
              they are still on the market. Reductions of 10 percent or less of the current
              price must be supported by documentation showing the property’s current
              condition (see appendix C, HUD Handbook 4310.5, REV 2). Further,
              according to its HUD contract, National Home’s marketing plan shall include
              a provision to reanalyze properties that fail to sell within 45 days from the
              initial list date.

          Further, we reviewed 10 HUD homes that were the subject of the complainant’s
          allegations regarding National Home’s awarding of the homes to buyers whose
          bids were not the highest. National Home received approval from HUD to award
          the homes even though the winning bid amounts were below HUD’s minimum
          acceptable bid amounts at the time the homes were listed for sale or did not result
          in the highest net returns to HUD. However, National Home did not maintain
          documentation of its rationale for accepting the bids for 2 of the 10 homes as
          required under its HUD contract. This resulted in National Home awarding the 2
          bids $26,000 below HUD’s minimum acceptable bid amount (see appendix C,
          HUD’s contract with National Home, section 5.4.2.1.1.2).

          National Home lacked adequate procedures and controls to ensure that it
          complied with its contract and HUD’s requirements. According to National
          Home, HUD directed it to sell the homes as quickly as possible. However,
          National Home did not follow its contract for executing the sales or provide
          documentation showing that HUD had relieved it of its contractual
          responsibilities. As a result, HUD lacked assurance that National Home
          represented HUD’s best interest and maximized the net returns to the FHA
          insurance fund.

Recommendations

          We recommend that HUD’s Deputy Assistant Secretary for Single Family
          Housing require National Home to




                                           8
1A.   Provide documentation showing that HUD approved the acceptance of the
      bids and the rationale for why acceptance of such bids would be in HUD’s
      best interest as required under its contract or reimburse HUD $36,455
      ($26,000 plus $10,455) from non-Federal funds for the losses HUD
      incurred on the five properties.

1B.   Implement adequate procedures and controls to ensure compliance with its
      contract, including but not limited to maintaining documentation to
      support its (1) rationale for approving bids below HUD’s minimum
      acceptable bid amounts or bids that do not result in the highest net return
      to HUD, (2) analyses of home that have been on the market in excess of
      45 days; and (3) notification of backup bidders in accordance with its
      contract.




                               9
                             SCOPE AND METHODOLOGY

We performed our audit work between June and December 2009. We conducted our audit at
National Home’s Independence, OH, office and HUD’s Chicago regional office. The audit
covered the period March 8, 2008, through May 31, 2009. We extended this period as necessary.

To accomplish our objective, we reviewed National Home’s contract and marketing plans,
applicable HUD regulations, mortgagee letters, and other reports and policies related to the
disposition of HUD homes. Further, we reviewed hard-copy information/documentation
maintained in National Home’s electronic management system3 such as bid printouts, sales closing
packages, closing documents, etc. We also conducted interviews with National Home’s
management and staff and HUD staff.

Using National Home’s and HUD’s Single Family Data Warehouse4 and Single Family Asset
Management systems, we identified 9,169 properties that received offers for purchase (bids) during
our audit period of March 8, 2008, through May 31, 2009. We randomly selected 72 of the 1,148
homes to review regarding the prospective buyers’ bids to determine whether the winning bids were
selected in accordance with HUD’s requirements and the bid amounts resulted in the highest net
return to HUD.

Further, using HUD’s Single Family Data Warehouse system, we identified 10,134 properties
that were managed and marketed by National Home during our audit period of March 8, 2008,
through May 31, 2009. Of the 10,134 properties, we statistically selected 179 properties for
review. Of the 179 properties, we reviewed 109 (61 percent) to determine whether National
Home complied with HUD’s time requirements for disposing of HUD-owned properties. We did
not review 70 of the 179 statistically selected properties due to time restraints However,
reviewing the remaining 70 properties would not have changed our audit results.

We conducted our audit in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our finding and conclusions based on our audit
objective. We believe that the evidence obtained provides a reasonable basis for our finding and
conclusions based on our audit objective.




3
  Electronic management system is an internal database used by National Home that contains imaged documentation
for each acquired property in HUD’s inventory such as, bidding documentation, inspections reports, appraisals, etc.
4
  Single Family Data Warehouse is an internal HUD database that contains information regarding FHA-insured
borrowers, such as names, addresses, Social Security numbers, and other personal financial data.


                                                        10
                              INTERNAL CONTROLS

Internal control is an integral component of an organization’s management that provides
reasonable assurance that the following objectives are achieved:

      Program operations,
      Relevance and reliability of information,
      Compliance with applicable laws and regulations, and
      Safeguarding of assets and resources.

Internal controls relate to management’s plans, methods, and procedures used to meet its
mission, goals, and objectives. They include the processes and procedures for planning,
organizing, directing, and controlling program operations as well as the systems for measuring,
reporting, and monitoring program performance.


 Relevant Internal Controls


              We determined that the following internal controls were relevant to our objective:

                     Program operations - Policies and procedures that management has
                      implemented to reasonably ensure that a program meets its objectives.

                     Validity and reliability of data - Policies and procedures that management
                      has implemented to reasonably ensure that valid and reliable data are
                      obtained, maintained, and fairly disclosed in reports.

                     Compliance with laws and regulations - Policies and procedures that
                      management has implemented to reasonably ensure that resource use is
                      consistent with laws and regulations.

                     Safeguarding resources - Policies and procedures that management has
                      implemented to reasonably ensure that resources are safeguarded against
                      waste, loss, and misuse.

              We assessed the relevant controls identified above.

              A significant weakness exists if internal controls do not provide reasonable
              assurance that the process for planning, organizing, directing, and controlling
              program operations will meet the organization’s objectives.




                                               11
Significant Weakness


           Based on our review, we believe that the following item is a significant weakness:

                  National Home lacked adequate procedures and controls to ensure that it
                   complied with its contract and/or HUD’s regulations regarding the
                   management and marketing of HUD homes (see finding).




                                            12
                                    APPENDIXES

Appendix A

                 SCHEDULE OF QUESTIONED COSTS

                             Recommendation       Unsupported
                                 number               1/
                                    1A               $36,455


1/   Unsupported costs are those costs charged to a HUD-financed or HUD-insured program
     or activity when we cannot determine eligibility at the time of the audit. Unsupported
     costs require a decision by HUD program officials. This decision, in addition to
     obtaining supporting documentation, might involve a legal interpretation or clarification
     of departmental policies and procedures.




                                             13
Appendix B

        AUDITEE COMMENTS AND OIG’S EVALUATION


Ref to OIG Evaluation   Auditee Comments




Comment 1

Comment 2


Comment 3

Comment 4

Comment 5




                          14
Ref to OIG Evaluation   Auditee Comments




Comment 6




                          15
                         OIG Evaluation of Auditee Comments

Comment 1   Based on documentation provided by National Home, we agree that National
            Home attempted to contact back-up bidders, when appropriate, for 14 of the 23
            homes cited in our discussion draft audit report. Therefore, we removed these 14
            case numbers associated with these homes from our final audit report. However,
            National Home did not provide sufficient documentation to support that it notified
            the backup bidders for the remaining 9 homes or its determination that the back-
            up bidders’ bids were not qualified. Therefore, the case numbers associated with
            these 9 homes remained in our final audit report.

Comment 2   Based on documentation provided by National Home, we agree that National
            Home notified prospective buyers, via their agents, of their selection in a timely
            manner for 6 of the 23 homes cited in our discussion draft audit report.
            Therefore, we removed these 6 homes from our final audit report. However,
            National Home did not provide sufficient documentation to support that it notified
            prospective buyers, via their agents, for the remaining 17 homes or its
            determination that their bids were not qualified. Therefore, the case numbers
            associated with 17 homes remained in our final audit report.

Comment 3   National Home provided documentation that HUD directed them to accept bids
            below its minimum threshold for four of the five homes cited in our discussion
            draft audit report. However, as stated in our draft audit report, National Home did
            not maintain documentation of its rationale for accepting the bids as required
            under its HUD contract. National Home only provided additional documentation
            supporting its rationale for seeking HUD’s approval to award one of the five
            disputed homes; therefore, we removed the case number associated with this one
            home from our final audit report.

Comment 4   We disagree. National Home did not provide documentation to support that the
            listing price for the homes, associated with case numbers, cited in our discussion
            draft audit report were eligible for a 10 percent reduction, or its reanalysis for the
            properties that were on the market in excess of 30 to 45 days as required by HUD.
            Therefore, these case numbers associated with the six homes remained in our final
            audit report.

Comment 5   Based on documentation provided by National Home, we agree that HUD
            directed it to hold these homes off the market for the city to complete its purchase
            of them via a bulk sale for two of the three homes cited in our discussion draft
            audit report. Therefore, we removed the case numbers that were associated with
            the two homes from our final audit report.

Comment 6   According to National Home’s contract, if an executed sales contract is not
            received within 2 business days, National Home shall notify the back-up bidders,
            if any, that they have 2 business days in which to submit a fully executed sales
            contract or the property will be reoffered for sale. According to National Home,



                                              16
HUD allowed for flexibility with its contract terms. However, National Home did
not provide documentation of which terms HUD allowed for flexibility.




                               17
Appendix C

             FEDERAL AND CONTRACT REQUIREMENTS

HUD Handbook 4310.5, REV-2, paragraph 6-23, requires that reductions of 10 percent or less of
the current price be supported by documentation showing the property’s current condition.
Acceptable documentation may be an inspection performed within the past 2 months or, for
example, a telephone report from the real estate asset management system to confirm the
property’s condition. A change in condition may result from, for example, vandalism or storm
damage. Provided this documentation is in the case file, no further documentation or
justification is required or expected for price reductions of 10 percent or less of the current price.

If reanalysis indicates that a reduction greater than 10 percent of the current list price is justified,
the reasons therefore shall be fully documented in the case file. In addition to a report of an
inspection performed within the past 2 months or other information which reflects the property’s
current condition as previously discussed, additional written justification is required. This may
be any legitimate reason for the recommended reduction, such as lack of market appeal or a soft
real estate market.

The single-family management and marketing services contract between HUD and National
Home, section 5.4.3.6, states that if an executed sales contract is not received within 2 business
days, National Home shall notify the backup bidders, if any, that they have 2 business days in
which to submit a fully executed sales contract or the property will be reoffered for sale.

Section 5.4.1.8 of the contract states that National Home shall determine, for each property listed
on a competitive basis, a minimum acceptable bid in the manner as described in its marketing
plan and record the minimum acceptable bid in the electronic management system file.

Section 5.4.2.1.1.2 of the contract states that National Home shall accept the bid that is equal to
or greater than the minimum acceptable bid and, subject to the exception in 24 CFR (Code of
Federal Regulations) 291.205(i), results in the greatest net offer for HUD. The net offer shall be
calculated by subtracting from the bid price the dollar amounts for the closing costs and real
estate sales commissions paid by HUD (24 CFR 291.205 (b) (1)). If all bids received are
unacceptable, National Home shall (i) request a government technical representative’s
concurrence to accept a bid that is less than the minimum acceptable bid and document in the
electronic management system the rationale for why acceptance of such a bid would be in
HUD’s best interest.

Section 5.4.1.7 of the contract states that National Home’s marketing plan shall include a
provision to reanalyze properties that fail to sell within 45 days from the initial list date.

HUD’s Single Family Acquired Asset Management System, Chapter 3 of the User’s Guide
Ver.5.1, page 3-174). – Monitoring parameters provides the total allowable duration time for
property to remain in the preliminary offer stage is seven days.



                                                   18
Appendix D

           SUMMARY OF MANAGEMENT AND MARKETING
            DEFICIENCIES USING HUD’S REQUIREMENTS

                                                     Missing documentation
              Contracts not         Missing           supporting the selected
                received by      documentation      winning bid amounts that
              Nation Home        supporting that   did not result in highest net    Untimely
   Case      within 2 business   backup bidders      return to HUD or below         contract
  number           days           were notified             minimum                acceptance   Loss to HUD
411-284058           √                 √
411-295528                                                      √                                 $8,455
411-365744          √
411-374758          √
411-394398          √                  √
412-227998          √                  √
412-323511          √                  √
412-372016          √
412-402065          √                  √
412-431834          √
412-494274          √
412-499467          √                  √
412-539496          √
412-550874                                                      √                                  3,900
412-554746          √
412-558464                                                                             √
413-312757                                                      √                                 22,100
413-347682          √                  √
413-414211          √                  √
413-428211                                                      √                                  2,000
413-445768          √
413-451618          √                  √
  Totals            17                 9                        4                      1          $36,455




                                                        19
Appendix D

     SUMMARY OF MANAGEMENT AND MARKETING
      DEFICIENCIES USING HUD’S REQUIREMENTS
                    (CONTINUED)

                                                     Adequate documentation
                                                      provided supporting the
                              Percentage of         analyses or reduction within
             Case number         reduction                    45 days
                           First reduction at 36
             413-445768    days was 10 percent.                 No
                           First reduction at 35
             412-297245    days was 10 percent.                 No
                            None. Property on
             412-519166     market for 49 days.                 No
                             30 percent at 121
             413-446770            days.                        No
                             90 percent at 390
             411-310572            days.                        No

             413-438181    10 percent at 35 days.               No




                                         20