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HUD/FHA remains on GAO's 'high risk' list.

While praising the progress made by the Department of Housing and Urban Development in addressing the weaknesses in its Federal Housing Administration single-family program and rental assistance programs, the Government Accounting Office is keeping the programs on its high-risk list, since more work still needs to be done.

In the single-family area, the GAO said HUD has taken steps to reduce the risk of financial loss to the FHA fund by improving its oversight of lenders and appraisers and increasing the use of foreclosure prevention measures. In addition, the GAO report notes that the department has issued a number of regulations intended to strengthen lender accountability and fight predatory lending.

"However," the report adds, "HUD needs to follow through on its initiatives and use its existing oversight tools more effectively to address continuing weaknesses. For example, HUD continues to grant loan underwriting authority to lenders that have not met the agency's performance standards."

Copies of "High-Risk Series: An Update," GAO-05-207, are available from 202-512-6000 or
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Publication:Valuation Insights & Perspectives
Date:Jan 1, 2005
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