Case Study

Sampling for the U.S. Department of Housing and Urban Development Single Family Post Insurance Division

Challenge: The U.S. Department of Housing and Urban Development (HUD) Single Family Post Insurance Division contractually recovers funds from mortgage servicers that submit insurance claims for Federal Housing Administration–insured mortgage properties due to improper payments. For the office that processes an annual average of 428,000 claim transactions for approximately $7.8 billion annually, the solution must be operationally and statistically accurate.

Solution: Over the past 15 years of supporting the office in recovering improper payments, Summit has designed and reevaluated the stratified random sample design that helps HUD effectively and efficiently use its limited resources for recovery efforts.

Result: The sample design Summit uses—and continues to assess the efficiency of—has allowed HUD to improve recovery amounts without requiring the office to expand the number of claims sampled that are subsequently evaluated by the HUD Post Claim review team. Additionally, Summit has successfully defended the design and associated calculations from inquiries from the mortgage servicer’s staff and counsel.