| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
|---|---|---|---|---|---|
| #7572 | Closed | public | FHA Lender |
|
We have a client who cannot certify to the questions in the LEAP submission and so will not have a timely submission. They tried to put an explanation in the submission to explain the issue but were locked out of the system. As a result they requested an extension this past Tuesday. Do we have any liability or responsibility as the auditors if there is not a timely submission? Also, what penalties does the client face for a late submission? |
|
|
From Mike Olsen: I am not sure your clients filing of the extension will accomplish anything because the deadline to file extensions was February 15 (45 days prior to the deadline). Maybe HUD will allow it because of the problem with the certification problem. However, you do not have any liability or responsibility as the auditors. There is really nothing you can do with the LEAP submission because of the certification problem. The certification must be done before you can enter the financial FDT and ARQ parts of LEAP. I assume you have the audit completed and dated prior to the deadline. There are no financial penalties for you client currently until the Notice of Deficiency expires. Next week HUD will send out Notice of Deficiency letters to all FHA lenders who have not filed. That notice will give them 30 days to complete their LEAP submission and get it accepted. After that notice has expired, HUD will send out Notice of Violation (NOV) letters. Those who receive NOV’s will be turned into the Mortgagee Review Board (MRB) and the MRB could impose civil money penalties of up to $8,500 per violation. They may reduce that amount to $3,500 but not any more than that. If they get a NOV they need to respond to it and explain the situation and request that they not be subject to the civil money penalties. If you would like to discuss this further, please email or call me. |