HUD OIG Reports That HUD Paid $1.85 Million In Unearned Fees To Contractor … No Termination For Default

HUD is poorly supervising the M&M contracts and HUD is wasting your taxpayer dollars. Below is a conclusion from an HUD OIG investigation of a HUD contractor. Why was there no termination for default? Read the whole 92-page HUD OIG report. It is a real eye opener on the poorly managed HUD M&M contractor operations. Shame on HUD for their contractor vetting and selection procedures.

“BLM failed to ensure that it adequately protected and preserved the properties that HUD assigned to it under the contract. This condition occurred because (1) BLM did not adequately manage the vendors performing the work, (2) it did not consistently follow up on exceptions noted by inspectors, (3) focused more on timeliness than quality, and (4) its quality control system failed to identify and correct performance issues. As a result, HUD paid BLM more than $1.85 million in unearned property management and inspection fees during the audit period. In addition, because of BLM’s non-performance, HUD-held properties were not adequately maintained, increasing the risk to the FHA insurance fund related to health and safety hazards and reduced sales prices. If BLM does not significantly improve its performance, HUD should determine whether BLM was in default of its contract and take appropriate action. The contract is valued at $20.5 million over the next year.”

Not only are these HUD post-foreclosure homes poorly managed and maintained, the are also unprotected. All of the HUD master keys codes have been compromised.

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