Large Savings Possible in Mortgage Insurance Premium Payment System

Much money can be saved by eliminating, reducing, or simplifying the Department of Defense (DOD) program of paying its employees' mortgage insurance premiums to the Department of Housing and Urban Development. (HUD)

The salary costs of HUD and DOD employees involved in billing and paying premiums amount to $700,000, while annual premiums paid by DOD to HUD amount to $2.6 million. To transfer funds from DOD, HUD bills Defense individually for 31,000 premiums due annually for military personnel covered under the program. The salary costs are high because of a 20% billing error rate. Billing data changes reported by DOD were not entered into HUD's billing files, causing the errors. Many bills sent to DOD should have been sent to private mortgage companies, while others which should have been sent to DOD were not. Because HUD did not correct all the previous year's errors reported by DOD, about one-third of the errors in 1974 were repeated in 1975.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: No director on record Team: No team on record Phone: No phone on record