The US Department of Housing and Urban Development (HUD) launched an initiative to review Federal Housing Administration (FHA) approved mortgage lenders with high foreclosure rates.

In a conference call held Jan. 12, Kenneth Donohue, the HUD inspector general, and David Stevens, the FHA commissioner, announced an initiative focusing on mortgage companies holding “significant” claim rates for the Federal Housing Administration mortgage insurance program.

HUD Office of Inspector General (OIG) served subpeonas to the offices of 15 mortgage companies across the country to gather documents and data on failed loans paid-out by the FHA mortgage insurance fund. The institutions had at least 1,000 FHA mortgages, were spread across the country and ranged in size.

“We will conduct an investigation if appropriate to determine who is responsible and recommend that appropriate action be taken against individuals and corporations. My office identified these direct-endorsement companies from an analysis of loan data focusing on companies with a large number of claims, loan underwriting volume, a high ratio of default,” Donohue said in the conference.