Taylor, Bean and Whitaker Mortgage Corp. has been removed from the Federal Housing Administration’s lender list after a federal investigation. Taylor Bean, one of the biggest mortgage brokers in the country, was recently invaded by Feds after a TARP-related deal with Colonial BancGroup fell through. Bloomberg has more:
The FHA, the government mortgage insurer, yesterday suspended Taylor Bean, its third-largest lender, citing possible fraud. It’s “distinctly possible this is going to be the end of Taylor Bean,” said David Lykken, managing partner at consultant Mortgage Banking Solutions in Austin, Texas.
FHA mortgages represent about half of all new loans for home purchases, up from about 10 percent at the start of 2008, as borrowers with low down payments or poor credit get turned down for other financing, according to a Bank of America Corp. report last month. Taylor Bean, based in Ocala, Florida, does business across the U.S. through loan brokers and other lenders. It ranked 12th among U.S. mortgage originators in the first half of this year with $17 billion of loans, or 1.7 percent of the total, according to industry newsletter Inside Mortgage Finance.
If closely held Taylor Bean goes out of business, mortgage rates may rise as lenders face less competition, said Michael Moskowitz, president of the New York-based home lender Equity Now Inc., which last sold a loan to Taylor Bean a year ago.
“It’s just a question of demand and supply,” he said in a telephone interview yesterday. “If Taylor Bean goes down, it’s a pretty big deal.”
Read more about the unfolding story here.
Update: If anyone has questions about their individual accounts, please do not email us at Business Pundit. Unfortunately, we don’t have the resources to research each account individually. We suggest calling Bank of America or keeping abreast of reader comments (below) for updates as the situation unfolds.