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CEO disputes audit concluding Nevada housing program ‘one of the worst’

Updated February 7, 2018 - 7:55 pm

WASHINGTON — A Nevada nonprofit criticized for its handling of federal funds intended to help financially struggling homeowners is disputing the conclusions of anaudit that labeled it was “one of the worst participants” in the federal program.

The audit report included a Treasury Department decision to shift $6.7 million from Nevada to other states.

In a letter and phone interview, Verise Campbell, the CEO of the Nevada Affordable Housing Assistance Corp., said the audit counted only 39 percent of homeowners helped by the program in 2017.

She said even though the state’s economy is improving, “There are still some homeowners out there that need help, and we want to help them.”

Campbell spoke out days after the Review-Journal reported that the audit by the Treasury’s Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) found that the Nevada nonprofit was “one of the worst participants” in the federal program.

Because the audit found it failed to meet thresholds for the assistance in 2017, Nevada will see a reduction of $6.7 million, which will be redistributed to other states under a decision made by the Treasury Department.

Audit’s figure at issue

Calls to Campbell seeking comment on the Treasury Department’s action at the time were not returned. But in her letter to the Review-Journal dated Feb. 6, Campbell said the newspaper’s original story incorrectly reported that only 167 Nevadans were assisted by the Nevada’s Hardest Hit Fund in 2017, when 260 households were actually helped.

When shown that the figures were from the inspector general’s audit, she said the report used outdated figures.

The actual language from the audit report said that “only 167 Nevada homeowners received help from (the Hardest Hit Fund) last year, even though 72,048 people in Nevada were unemployed and the program has $84.7 million available to help them.”

Robert Sholars, communications director for SIGTARP, said the nonprofit may now have more current information, “but the number provided in the report is accurate, and we stand by it.”

The Nevada Hardest Hit Fund was created in 2010 to distribute TARP funds to provide principal reduction, unemployment mortgage assistance and second-mortgage reductions following the housing crisis during the Great Recession. The federal program is under the Treasury Department and the Nevada Housing Division, which contracted with NAHAC to administer it.

An earlier audit by SIGTARP in 2016 found $8.2 million in waste and abuse by the state program, including an $11,000 expense for a Mercedes-Benz for the then-CEO, who was later terminated. The agency also spent $10,963 on employee perks, bonuses, outings and lunches.

Unpublished phone number

Nevada officials also complained in 2015 that the agency was not making the funding available to the public. In a letter to the Treasury Department, the officials said “the public cannot reach NAHAC staff because they have an unpublished telephone number.”

The audit report in 2016, and the abuse in Nevada, prompted Sen. Charles Grassley, R-Iowa, to seek a full audit of the TARP program and the Hardest Hit Fund in 2017.

Campbell was elevated to CEO of NAHAC after 2016 as part of an effort to address issues at the nonprofit, said Teri Williams, a spokeswoman for the director of the Nevada Department of Business and Industry, which oversees the Nevada Housing Division.

In response to the charges of wasteful spending, Campbell, in her letter, said “NAHAC acknowledges the missteps of the previous administration.”

“The state of operations prior to my arrival bears no resemblance to NAHAC’s current culture of accountability and full transparency,” she said.

In the telephone call, Campbell acknowledged that “it’s been a daunting process to turn this program around.”

Nonetheless, the SIGTARP audit found that during the past year, the agency did not provide mortgage modification assistance to any homeowners despite the fact that there were 49,849 homeowners in the state who owed more on their home than it was worth.

‘A disservice’ to Nevadans

Rep. Dina Titus, D-Nev., called the audit findings “disgraceful and a disservice to the good people of our state.”

Titus is seeking a Nevada attorney general investigation and wants the state to restructure the program again to provide more oversight.

A spokeswoman for Nevada Attorney General Adam Laxalt said “with respect to the Hardest Hit Fund, the matter remains with federal law enforcement, and the attorney general’s office stands ready to assist.”

“In fact, our office has reached out to the federal investigatory agency several times since September of 2016,” the spokeswoman said.

The Office of the Special Inspector General for TARP also has law enforcement authority to investigate wrongdoing, in addition to auditing.

Sholars said he could not comment on, or confirm, ongoing federal investigations.

Campbell said the Nevada program remains under audit, but she was unaware of any separate federal investigation by SIGTARP or other agencies.

Sholars urged Nevadans who have had problems with NAHAC to report their complaints to a hotline at www.sigtarp.gov/hotline.

Contact Gary Martin at gmartin@reviewjournal.com or 202-662-7390. Follow @garymartindc on Twitter.

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