Audit: Better monitoring of foreclosure settlement funds needed
The Nevada attorney general’s office needs to strengthen its monitoring of settlement funds designed to help victims of the foreclosure crisis in Nevada, a legislative audit has found.
Even though most disbursements were made to victims, some policies and procedures were not always followed on a program administered with settlements funds that’s supposed to provide relief to homeowners, the audit found. That resulted in $56,195 in overpayments to nonprofit organizations.
Some victims had received foreclosure notices before Nevada participated in a multistate settlement in 2012 when 49 states sued major banks.
“The office reimbursed grantees for the amounts requested despite lacking adequate supporting documentation,” said the audit of the Home Again program, which started in 2013.
The office has a corrective action plan due Feb. 19. It also has a six-month report on the status of improvement recommendations due Aug. 19.
The money that was overpaid to nonprofit groups has been repaid. The program provides a foreclosure hotline, and legal and credit counseling through nonprofit organizations.
Monica Moazez, the attorney general’s acting communications director, said improvements under Attorney General Adam Laxalt’s leadership have already begun to address issues identified in the audit.
The office went after and obtained $164 million in settlement funds from financial institutions for deceptive mortgage lending practices from fiscal years 2011 to 2014, according to the audit.
“These funds were to be used to help mitigate the effects of the foreclosure crisis on Nevada citizens,” the audit said.
About $33 million were set aside to administer the Home Again program.
The audit found the office review of nonprofit groups’ requests for expense reimbursements was not adequate and no annual fiscal audits were performed, despite having policies and procedures in place requiring them. Only one partial audit was performed in 2½ years.
The legislative audit found $21,006 overpaid to nonprofits groups. The audit focused on fiscal years 2011 through 2014, and some in 2015.
After audit inquiries, more overpayments were identified, bringing the total to $56,195.
In addition, “performance data reported to the Legislature was not always accurate.”
Information for one in 2014 that was provided to the Legislature’s Interim Finance Committee was “significantly overstated.”
“For example, the number of persons assisted through the credit restoration program was reported to be 1,970,” the audit said. “However, supporting documentation showed only 696 persons received assistance.”
The audit also found that about $11 million was not timely returned after a third-party administrator was unable to locate the victims to disburse the money.
Contact Yesenia Amaro at yamaro@reviewjournal.com or 702-383-0440. Find her on Twitter: @yeseniaamaro
