A Bank of America servicing unit for reverse mortgages in Seattle failed to comply with HUD rules on verifying that the properties continue to be principal residences and providing timely notice that the borrower has deceased, according to a "HUD audit":http://www.hud.gov/offices/oig/reports/files/ig0961013.pdf. In its response to the audit, BofA demurred, saying that it has appropriate procedures in place for verification and that instances of noncompliance in timely notification of death generally dated to the time before BofA took over servicing of the loans. The audit of the home equity conversion mortgage (HECM) servicing unit in Seattle covered 60 HUD claims from the unit on more than 4,000 reverse mortgages in five Southwestern states (Arkansas, Louisiana, New Mexico, Texas and Oklahoma). The audit sampled 13 of the 60 claims. The audit by regional inspector general Gerald Kirkland said that BofA's failures in compliance "could result in the properties remaining vacant longer, increased property deterioration, the need for additional maintenance, and potential decline in property value." In its response to BofA's reply, the office of the inspector general (OIG) acknowledged that BofA had the procedures in place to obtain annual verification of principal residence, but does not always comply with these procedures. The OIG recommended that BofA be directed to actually complete the verification annually. The audit found that the servicer failed to notify HUD within 60 days of a borrower's decease and to commence foreclosure within six months, with foreclosure being delayed anywhere from one to 11 months beyond the required period. The OIG dismissed BofA's argument that the borrower in some cases died before BofA took over the loan, noting that the acquiring mortgagee is required to obtain complete files.