Taylor, Bean and Whitaker (TBW) Suspended From FHA Lending
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Update 8/5: TBW Shuts Down
The third largest FHA lender in the country Taylor, Bean and Whitaker Mortgage has been suspended from FHA lending effective immediately. In addition, the Government National Mortgage Association (Ginnie Mae) is also defaulting and terminating TBW as an issuer in its Mortgage-Backed Securities (MBS) program and is ending TBW’s ability to continue to service Ginnie Mae securities.
“Today, we suspend one company but there is a very clear message that should be heard throughout the FHA lending world – operate within our standards or we won’t do business with you,” said HUD Secretary Shaun Donovan.
FHA Commissioner David Stevens said, “TBW failed to provide FHA with financial records that help us to protect the integrity of our insurance fund and our ability to continue a 75-year track record of promoting, preserving and protecting the American Dream. We were also troubled that the Company not only failed to disclose it was a target of a multi-state examination and a separate action by the Commonwealth of Kentucky, but then falsely certified that it had not been sanctioned by any state. FHA won’t tolerate irresponsible lending practices.”
TBW may appeal its immediate suspension by submitting a written request for a hearing before an Administrative Law Judge within 30 days. Such a request will not delay the action FHA is announcing today.
In conjunction with TBW’s suspension, HUD sent notices of proposed debarment to TBW’s Chief Executive Officer, Paul R. Allen, and TBW’s President, Ray Bowman. Mr. Allen’s proposed debarment alleges that he submitted false and/or misleading information to Ginnie Mae regarding TBW’s delay in submitting its audited financial reports for fiscal year ending on March 31, 2009. Mr. Bowman’s proposed debarment alleges that he submitted two false certifications to HUD on TBW’s Yearly Verification Report. Mr. Allen and Mr. Bowman have thirty days to contest the proposed debarments.
This action will massively impact small brokers and community banks across the country who rely on TBW to underwrite and close their FHA loans. I have already heard from many loan officers with loans in process, and home purchases on the line. They will now have to find new homes for those loans. We will have to wait and see how this situation impacts the housing recovery.
Tagged with: taylor bean and whitaker • tbw
Filed under: FHA Updates
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Great news on TBW!!!!!
I had just one loan with them last year and just before it went into closing they dropped it like a hot potato, then put a short moratorium on this type of loan (manufactured homes) then came back with the new rules, then denied my loan with absolutely no legitamate explanation
Glad this one bit the dust!!!
Marsha,
No matter what one individual has experienced on a borderline risky transaction in the past, the loss of the third largest FHA lender in the country along with countless jobs, small mortgage brokerages, the mortgage departments of many community banks and the enormous disruptions of borrowers’ and sellers’ real estate closings and lives is nothing to be happy about.
Carl, I totaly agree. Too bad people find pleasure in another’s downfall.
Well A friend was about to close his home in a rural area in NE GA where the job market was very poor, to move to a better ecomony. The borrowers were looking for a non -triditional loan company because they had never borrowed money in their livees but wanted a home. They were approved by TBW last week but had not closed, looks like it will all go south. Its sad when you have two jobs, your wife works, and you can not get a bank to loan you money on a double wide home because you never borrowed in the past,yet have the ability to repay it. These greedy bankers are really screwing up the banking system, they all need to fail so we can get a fresh start to a new future, but the government is more interested in bailing out car dealers thru clunker programs only available to credit worthy individuals. The ironic part of this is my friend will pay capital gains tax of 21% (15% federal and 6% state) if he sells which will go to some eleses clunker rebate, and he works for Wal-Mart at 8/per huor and cant afford a loan for a new car himself!
The rich get richer and the poor finance it! BY the way if anyone knows of a company that deals in non traditional home loans,let me know! Smithrichardp@netzero.net
I, for one, am not happy about FHA’s sudden suspension of TBW. I work for a small community bank that sells about half of our mortgage loans to TBW. We are going to be stuck with about $2,000,000 worth of loans in our unfunded pipeline with them, that we are going to have to find other lenders for. This is going to be very difficult because the rates on these loans are lower than the current rates today. I don’t blame FHA for suspending their originating abilities, but if they really want to help good lenders and good borrowers, leaving them stuck with unfunded loans is not the way to do it! There should be a grace period to get loans in the pipeline funded and sold to Freddie Mac, Ginnie Mae, etc. And regardless of how abysmal TBW’s service may have been lately, I can’t feel happy about over 1,200 workers being out of their jobs unexpectedly this afternoon. This isn’t helping the economy, the lenders, the borrowers or anyone else in this mortgage mess!