HUD audit finds REO field servicers often underpaid

The recent Office of Inspector General audit of the U.S. Department of Housing and Urban Development reveals an uneven application of compensation to property preservationists.

Despite promise of the third generation of the Management & Marketing to “streamline HUD’s operations, capitalize on the expertise of its potential vendors, and provide flexibility to meet changing market conditions in the REO industry,” the program often fails to properly compensate the handlers of these properties.

However, the OIG finds several examples of field servicers being overpaid — but in more cases underpaid — in regards to bids on real estate properties.

“HUD did not always pay field service managers in accordance with their contractors, resulting in an estimated net underpayment of $553,784,” the report states, citing five inadequate procedures taking place across HUD offices.

Read on.

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