On Friday, the Inspector General of the Department of Housing and Urban Development, which includes FHA, said the agency lacks the ability to ensure that lenders meet its requirements.The AP has more on the report. (I haven't seen the report yet).
The report also said that FHA did not obtain or consider negative information on lenders from other HUD offices, follow up on whether the required fees or documentation were collected, or properly dispose of lender application files containing personally identifiable information.
No wonder so many FHA lenders have off-the-chart default rates (see: FHA Lenders with High Default Rates).