Neighborhood Watch, the Federal Housing Administration's "early warning system" for monitoring mortgage defaults and lender performance, crashed more than two weeks ago and it's unclear when the service will be restored.
The single-family Neighborhood Watch System has become a valuable tool for FHA officials, loan aggregators and warehouse lenders to track lenders and the performance of the FHA-insured loans they originate since it was launched in 1998. But the Web-based system crashed on July 27, and Department of Housing and Urban Development officials could not say when it will be back up.
"HUD and its Web contractor have been working aggressively to restore the system as soon as possible. Unfortunately, despite the contractor's efforts, the system has not yet been fully repaired," said HUD spokesman Brian Sullivan. "Instead of rushing to patch a broken system, possibly leading to outdated information being provided, the contractor is working to make improvements ensuring the system provides correct and valid information to its users."
"We're sorry for any disruption this may cause to our partners but hope to have a fully functioning system in the near future," Sullivan added.
Last year, HUD awarded a contract to "assist with the steady-state operation, maintenance and enhancement" of Neighborhood Watch and other systems to IT engineering services firm ActioNet,
Neighborhood Watch tracks early defaults (90 days or more past due) on loans originated over the last two years. Lenders with high default rates can be targeted for audits and administrative actions.
The crash of the Neighborhood Watch may also delay implementation of a new
— Austin Kilgore contributed to this report
