Waste, Fraud & Abuse Flourished Under Former Secretary Fudge
A report by the U.S. Department of Housing and Urban Development found that more than $5 billion in taxpayer funds were paid to unknown parties during former HUD Secretary Marcia Fudge’s final year atop the agency. The payments reportedly included aid to roughly 30,000 deceased individuals and thousands of ineligible recipients. In fiscal year 2024, according to the report:
- $77 million was paid to deceased tenants
- $150 million went to recipients with non-existent Social Security Numbers
- $288 million went to pay excessively high rents
- $5.2 billion went to recipients with inactive accounts
Assistance to recipients who had passed away was identified in all 50 states, a pattern federal officials described as “widespread.” The nation’s beleaguered state-licensed real property appraisers, subject of a four-year-long harassment campaign by HUD under Secretary Fudge, know there will be much more waste, fraud and abuse to be uncovered. But more on that in a minute.
In February, HUD’s public employee union sounded the alarm on fraud, waste and abuse at the federal agency. The union had been contacting key legislators. It followed the submission of Inspector General complaints detailing systemic mismanagement under the leadership of HUD’s Public and Indian Housing division.
Investigators tracking the billions in erroneous and fraudulent federal assistance under former Secretary Fudge, should also look at HUD’s involvement with a crony nonprofit known as the National Fair Housing Alliance and a web portal run by HUD as a clearinghouse that connected a handful of crony civil rights lawyers with insider nonprofits able find and groom plaintiffs. Earlier in the year, the site, known as the “HUD Exchange,” was purged of content promoting disparate-impact theory in the appraisal of real estate: Toxic material that blamed real estate analysts for America’s racial wealth gap and helped coach potential complainants in nuisance lawsuits.
The portal, which appeared to have been taken over by HUD in 2020, was still being operated by a tiny federal agency whose stated mission was to provide resources for wounded, ill and injured service members and their families. HUD somehow wrested control of it.
It is believed that about 300 real property appraisers were ensnared – some still are – in HUD probes based on bogus complaints by questionable complainants using nonprofits as surrogates and contract HUD investigators. The latter are not subject to Title 5 conflict-of-interest constraints applicable to federal employees. By all accounts, the appraisers were simply doing their jobs, which includes occasionally filing a report that sends a buyer and seller back to the negotiating table. HUD and the aligned nonprofits and civil rights law firms worked to racialize the appraisal process in federally backed mortgages in shakedowns using the courts. Last year, two federal district judges, one in Ohio and one in Maryland, tossed these nuisance cases in summary judgment. But prior to the dismissals, many hapless appraisers and their insurers simply caved and settled, which was the strategy all along.
To deflect criticism, HUD has perfected the art of blame-shifting over the years. Its perennial bogeyman is discrimination. The redirect has allowed HUD to deflect bad headlines related to its involvement in slum housing, fraud and incompetence.
Most alarming, in 2023, HUD posted notice in the Federal Register seeking to allow convicted felons – white-collar criminals, perjurers and others – to become “discrimination testers.” You can read the rulemaking here. Who better than white-collar criminals and perjurers to manufacture discrimination claims.
According to an Inspector General’s report last year, HUD couldn’t account for spending at its two largest programs. It was the seventh straight year officials couldn’t estimate the scope of incorrect payouts at internal divisions that account for two-thirds of the department’s total annual expenditures. We’re only now starting to see the sheer scope of the waste, fraud and abuse.
A fitting metaphor here is HUD’s derelict Washington, D.C., headquarters, the Robert C. Weaver Federal Building. In June, HUD employees were moved from the building as it became a health and safety hazard. This is due largely to the agency’s noncompliance with basic building and safety standards over many years – standards the agency enforces on private landlords.
The building, at 2415 Eisenhower Avenue near L’Enfant Plaza, had backlogged over $500 million in deferred maintenance. According to the agency itself, the deferred maintenance led to severe health and safety issues, leaks, and structural and maintenance failures.
It’s time for Congress to do something about this out-of-control federal agency. The failed experiment needs to be wound down.
- Waste, Fraud & Abuse Flourished Under Former Secretary Fudge - January 5, 2026
- Inflated Prices, Taxed to Death - August 21, 2025
- No, Appraisers Didn’t Cause America’s Racial Wealth Gap - August 6, 2025
My FOIA request to expose more fraud has been pending over 10 months.
https://appraisersblogs.com/uncovering-flaws-in-fha-appraisal-n-loan-review-process/
And what many don’t know about this “esteemed” (ha) organization is this – when FNMA MAKES money, it is theirs to keep, but when they LOSE money, the US taxpayers pick up the tab.
It 5 billion in “possible ” inproper rental assistance payment that were paid by housing authorities. Nothing to do with us. Assuming it actually happened.
Larry Bohnert did you perhaps entirely miss the part of the article that entirely had to do with us?
Regardless, it shows the leadership at FHA spent more time working to convince the public that appraisers were to blame for the financial wealth gap amongst races and that the profession is operationally racist on its face than properly handling tax payer funds.
Mike Chavez Jr. You mean HUD?
Oh, please …
I was gonna say what Dave Chappelle typically says, but I decided it was better not to.
We all know the lowest on the proverbial Totem Pole catches the most mud that flies.
We knew all along. ⚖️
I don’t think I’ve ever dug my heels in so hard on something so controversial in my life.
So many caved in leadership and piled on to the lies by deflecting and projecting regulatory deficiencies onto licensees – for their own profit.
Crazy!
The business of exploiting tax dollars. NFHA non profit summary. Online
https://projects.propublica.org/nonprofits/organizations/521676364
Details / An independent audit commissioned by this organization for the fiscal year ending Sept. 2024 identified:
Significant deficiency in internal controls Audit identified a deficiency in internal financial or governance controls that could limit the organization’s ability to track and report financial data reliably.
Other online results; Various associated financials. /click on; past rewards received.
https://www.instrumentl.com/990-report/national-fair-housing-alliance
The Inspector Generals report (article link); This marks the 7th consecutive year that HUD will be unable to report improper payment estimates for these programs and the 11th consecutive year that the Office of Inspector General (OIG) will find that HUD is not in compliance with improper payment laws.
Goes on to say, the people don’t understand how the other side is processing payments. The workers are not educated on how the technical payment systems process payments. You’ll need a better managed payment structure, detailed plans on how to prevent improper payments, become in compliance eventually, test programs, provide sampling reports.
Sorry to inform those still having faith in government support systems. Most of the waste fraud and abuse situations are not from bureaucracy, poor planning, or lack of technical know how. There is an open door the size of the grand canyon to commit fraud. Nobody ever goes to jail being the primary incentive. They keep the money even if it’s identified as improperly distributed later. Everyone knows exactly what’s going on because entire groups of inside people have gotten filthy rich from exploiting these government programs for generations. The only thing to really have changed, is now that the word is out, more people are demanding to be cut in on the action. They’ll do and say anything, use the force of an excessive government ruthlessly without hesitation. No limits. ‘Rise of the non profits.’ Your tax dollars, hard at work. Nobody is actually investigating anything and the one thing you can count on; nobody will go to jail.
But, but, but isn’t it us who are the criminals? Really, we are no longer identified as the bane of existence? Have I been under this cloud of guilt when the accuser was actually a prolific abuser of the law? Will she suffer the same redicule and stress she imposed on us? I’m in on the class action
How else are Democrats going to fund their lavish lifestyles? Take that 5+ $billion and multiply it by 10 or 20 and that will probably be closer to reality. So, why do you think Fudge and all of the other little fudge bars were screaming at and about appraisers? Yep. To distract the public from what the Fudges were doing. When Democrats are screaming at any particular group, they are simply projecting what they are doing. Follow the money. Monsters from the id …
Big time! Mostly related to her own racism.
If anyone is owed Reparations in this country it is the Independent Fee Appraiser. We have been robbed of $Billions since Dudd-Fwank was implemented in 2010. In 2007 they were increasing the education requirements because too many Appraisers were entering the profession they thought, since DF handed the AMC machine their golden tickets to hold us as Chattel… you would have to be stoopid to enlist in this “career”. Like Healthcare they need to remove the “middleman”. Just give me back my business and inflated fees and turn times will NOT be your problem. But that’s just my opinion, I could be wrong. Peace
You’re not wrong, you’re just saying the quiet part out loud. Independent fee appraisers didn’t just lose income after Dodd‑Frank; we lost autonomy, leverage, and the basic dignity of running our own businesses. The AMC “golden ticket” turned out to be a one‑way ride to doing more work for less pay while being treated like subcontracted background noise.
Remove the middleman and suddenly the “turn‑time crisis” evaporates, fees make sense again, and the profession stops looking like a cautionary tale. Funny how the simplest fix is the one nobody in power wants to touch.
Peace right back at you.