Audit of VBA's Liquidation Appraisal Oversight in the Cleveland and Phoenix Regional Loan Centers

Report Information

Issue Date
Report Number
10-04045-124
VISN
State
Arizona
Ohio
District
VA Office
Veterans Benefits Administration (VBA)
Report Author
Office of Audits and Evaluations
Report Type
Audit
Recommendations
4
Questioned Costs
$0
Better Use of Funds
$0
Congressionally Mandated
No

Summary

Summary
OIG evaluated the effectiveness of the VBA’s Loan Guaranty Program (Program) which paid just over $1.4 billion to acquire about 14,000 foreclosed real estate properties. We found improvement of liquidation appraisal oversight was needed at the Cleveland and Phoenix Regional Loan Centers. Comparable properties and sales price adjustments were not consistently reviewed to establish appraised value. Policies and procedures did not include sufficient criteria for loan center staff to evaluate every appraisal. The Program did not use an automated appraisal review tool and VA may not have paid fair and reasonable prices when acquiring properties. We recommended policies and procedures be revised, use of an automated appraisal review tool, implement a comprehensive risk management program, and revise the Program managers’ performance plans.

Open Recommendation Image, SquareOpenClosed and Implemented Recommendation Image, CheckmarkClosed-ImplementedNot Implemented Recommendation Image, X character'Closed-Not Implemented
No. 1
Not Implemented Recommendation Image, X character'
to Veterans Benefits Administration (VBA)
We recommended the Under Secretary for Benefits revise Loan Guaranty Service policies and procedures to include more specific criteria for evaluating appraisal comparable property selections and sales price adjustments.
No. 2
Closed and Implemented Recommendation Image, Checkmark
to Veterans Benefits Administration (VBA)
We recommended the Under Secretary for Benefits implement an automated appraisal review system to evaluate every liquidation appraisal.
No. 3
Closed and Implemented Recommendation Image, Checkmark
to Veterans Benefits Administration (VBA)
We recommended the Under Secretary for Benefits fully implement all defined elements of the Loan Guaranty Service Risk Management Program.
No. 4
Closed and Implemented Recommendation Image, Checkmark
to Veterans Benefits Administration (VBA)
We recommended the Under Secretary for Benefits revise the performance plan of the appropriate Loan Guaranty Service manager to ensure accountability for accomplishment of specific Risk Management Program requirements.