Mortgage originator Taylor, Bean and Whitaker was suspended by the FHA yesterday for various violations and has now ceased all originating and funding operations, according to a release obtained by Mortgage Implode.
The action was imposed after it became clear that the Ocala, Florida-based mortgage lender failed to submit a required annual financial report and misrepresented the fact that there were no unresolved issues with its independent auditor.
In actuality, the auditor ceased its financial examination of the company after uncovering irregular transactions that pointed to fraud.
TBW also failed to disclose that it was the subject of two examinations into its business practices within the past year.
Going forward, the company is barred from originating and underwriting new FHA loans, and Ginnie Mae is also defaulting and terminating TBW as an issuer in its mortgage-backed securities program.
Ginnie Mae will also take control of the company’s nearly $25 billion loan securities pipeline.
“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.
Back in April, the lender struck a $300 million deal with Colonial BancGroup, a long-time mortgage partner, in order to make it eligible for much needed TARP funds in exchange for warehouse funding, but that fell apart just days ago.
Both companies were raided by federal officials on Monday and now it looks as if we could have another huge failure on our hands.
Taylor, Bean, and Whitaker had been the third largest direct endorsement lender of FHA-insured loans and the eighth largest issuer of Ginnie Mae mortgage-backed securities.