The Department of Housing and Urban Development is doing a poor job of overseeing FHA lenders, according to the agency’s Office of the Inspector General, which has found high error rates in ongoing reviews of underwriting. FHA continues to struggle with poorly underwritten mortgages, according to testimony by HUD Inspector General David Montoya in a hearing this week before the House Financial Services Oversight and Investigations Subcommittee. In light of “the apparent systemic problems with the underwriting of FHA insured loans” and successful pursuit of civil enforcement against violators, the HUD IG joined with the Department of Justice and HUD’s Office of General Counsel in early 2012 to focus on the underwriting practices of 10 of the largest FHA-approved lenders. “To date, the underwriting of thousands of FHA insured...