3rd Largest FHA Lender, Taylor Bean and Whitaker Shut Down
August 6, 2009 by Danilo Bogdanovic
Filed under Mortgage/Lending, News
If the Federal Housing Administration is trying to send a message, it just did – using an elephant gun. The country’s 3rd largest FHA lender, Taylor, Bean and Whitaker Mortgage Corp., ceased lending and closed its doors yesterday after being barred from making new loan guarantees by the FHA (click here for excerpt of TBW press release).
The FHA, citing concern about possible fraud, plans to sanction two top officials at Ocala-based Taylor Bean for providing “false” information to the agency, according to an FHA statement released yesterday.
Why does this matter to you?
Because TBW will not servicing any of the estimated 30,000 loans it has in its pipeline – and your loan may be one of them. This includes those loans that mortgage brokers used TBW as the originator for. Though it looks like Bank of America will be taking over servicing of these loans, borrowers could still be looking at possible delays.
What lead to this?
FHA Commissioner David Stevens explains,
“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.”
Lesson #1: Don’t mess with the new FHA.
Lesson #2: Be wary of mortgage brokers – you don’t always know who they’re using to fund your loan and it could be a company such as TBW. Using a direct lender is typically safer, less expensive and comes with a higher level of service (click here for more on mortgage brokers vs direct lenders).
Sources: Media-Newswire, Reuters, Bloomberg
Jackie on Thu, 6th Aug 2009 4:52 pm
I have this mortgage company and my husband and I have felt screwed by this company. We were told that our payments would be about $600.00 a month and are now paying over $900.00 a month even though we paid an extra $16000.00 plus extra per month. They are always late paying the insurance payments also. Be careful if using this company.
Danilo Bogdanovic on Thu, 6th Aug 2009 5:34 pm
Jackie – Sorry to hear about your experience with them. Did you do a fixed rate mortgage or an ARM?
And I’m curious as to whether your problems will persist or go away once Bank of America takes over the servicing of your loan. If you don’t mind, please keep the other readers and me posted.
Jackie on Thu, 6th Aug 2009 8:59 pm
It is a fixed rate.
Jackie on Thu, 6th Aug 2009 9:01 pm
Our insurance company detest working with Taylor, Bean and Whitater because they always wait until the insurance has expired before paying the amount due.
Danilo Bogdanovic on Fri, 7th Aug 2009 12:10 pm
Were you quoted $600 on the Good Faith Estimate and then it was $900 at settlement? Or did it change to $900 after you settled at a later date? If it’s a fixed rate, it shouldn’t have increased after settlement.
Jackie on Tue, 11th Aug 2009 5:36 pm
It was suppose to be $600 with taxes and insurance included. Afther the first year the taxes were decreased because of our filing for home stead. But our payments just keep going up.
Jackie on Tue, 11th Aug 2009 5:36 pm
It was suppose to be $600 with taxes and insurance included. Afther the first year the taxes were decreased because of our filing for home stead. But our payments just keep going up.
Dwayne on Wed, 12th Aug 2009 9:55 am
I have tried to contact Taylor Bean for last six months, and was put on hold one time 2 hrs, they never called back to the phone. I am really concerned about my mortgage. The taxes are due, will they make the payment? Should should I make my payment next month? My question is, when will be notifed.
Danilo Bogdanovic on Wed, 12th Aug 2009 5:24 pm
Jackie – You should check with the lender to see why the amounts changed.
Dwayne – That’s a valid concern especially after hearing what is happening to Jackie and her homeowner insurance. Check with the tax department of the state the property is located in for guidance on that one. I don’t want to give out tax or legal advice because I’m neither an accountant nor a lawyer.
chris on Thu, 13th Aug 2009 5:45 pm
Well banks do offer some better costs scenarios but I have out priced credit unions and direct lenders alike and vice versa…timing is key…we are all about the buck…I have worked for banks, brokers, direct lenders and the only difference is that they have different names. These new disclosures and HVCC, FLA,…etc are setting the stage for the major banks to control lending and pricing. Think in terms of OPEC, when have they ever been sensible in pricing?
You think your troubles with TBW are over? ha ha Most of their portfolio, if not all of it, is going to Bank of America…another deal thats been in the works for sometime…People should start to see what is coming to be…
-BOA takes over countrywide, Merylls assetes(mostly MBS), TBW portfolios and servicing
-Wells Fargo controls Wachovia which owned World Mortgage
-JP Morgan owns Washington Mutual and a lot more…and it continues
competition is dwindiling, the major banks want to control all the financing and will soon force other lenders out as well as brokers, That means rates and pricing will go up…if you think customer servie is bad now, get your rolaids ready…
Don’t forget many of the commerical Arms are set or already are adjusting with a high default rate predicted…Recession bottoming…I wish that were true..but it looks like a bigger wave is coming to shore than before…
Thats my opinion – thanks for hearing me
Lynne on Thu, 13th Aug 2009 7:32 pm
I have had many problems trying to reach someone at T,B,& W concerning my mortgage. When calling them on the phone you can expect to spend an hour or more waiting to get a live person. They have refused to answer my questions and have threatened to foreclose, but refuse to list my payments in a timely fashion.
I contacted an attorney, ready to take them to court. I didn’t care what the expense.
Who is responsible for closing T,B & W down? I need an address so I can send them a cake, shine their shoes or give them a big kiss. Thanks so much for the wonderful news!
Adam on Fri, 14th Aug 2009 11:32 pm
We tried to get a loan modification for almost one year with TBW and they were playing around with our time and our loan packages. Our financial situation changed dramatically so we are trying desperately not to lose the house and benefit from the Home Affordability Program.
We submitted our file twice for refinance and no answer back and now it seems that they are in big trouble. Do we have to pay them for our mortgage now?
What is your advice for us?
Thank you,
Camelia & Adam
Danilo Bogdanovic on Sun, 16th Aug 2009 4:47 pm
Chris – Thanks for bringing up those great points. Would love to add one to your already great list – Many of the largest banks are basically at the mercy and beckoning of the U.S. government thanks to TARP and other programs – so who really controls all of the financing?
Danilo Bogdanovic on Sun, 16th Aug 2009 4:56 pm
LOL Fannie Mae booted them off their approved lender list and Ginnie Mae yanked their $25B portfolio back from them. Guess you could send a cake to each of their CEOs.
Danilo Bogdanovic on Sun, 16th Aug 2009 5:58 pm
Camelia and Adam – You should continue paying your mortgage as you’re supposed too even though you’re trying to do a loan mod. Continue calling and emailing TBW regularly. You could also try contacting your local Congressman – they can sometimes help move things along.
Looks like Bank of America (BoA) is taking over servicing of the loans. You could try contacting BoA to see if they’ve switched your loan over to them, but no guarantee there either.
Jerry barton on Mon, 17th Aug 2009 12:41 pm
I have a loan modification with them currently. I have paid my first two payments,sending the third one for Sept the end of this month. I am not sure now who to send this third payment to and who will send me the fnal papaerwork of the terms after the third trial payment is sent? Help Please
Danilo Bogdanovic on Mon, 17th Aug 2009 7:47 pm
Based on what typically happens in situations like this, I would continue to send my payment where I have always sent it unless I receive notice otherwise. But that’s just me… Double check with TBW for further guidance.
John on Mon, 17th Aug 2009 9:48 pm
The problem is that you can go thru a any local bank for the loan an as soon as the loan is closed they sale it to anyone they want.
Danilo Bogdanovic on Tue, 18th Aug 2009 2:42 pm
From what I’ve seen around the DC metro area, local banks actually hold on to their loans more so than others. It’s mortgage brokers that sell the loan immediately. Mortgage brokers are just the “middleman” who qualify you and then sell your loan to a direct lender who works with them, usually the one that offers them the best deal. It’s more hands in the pot which can lead to higher rates and fees as well as less control over the transaction.
heather on Mon, 31st Aug 2009 3:27 am
we had the same problems as above told us one thing then tried to charge another at signing.so we had to up the amount of our loan and payments to make everything fine. Also WE did a VA loan and they over charged us by thousands. I looked at the va rules about what we are allowed to be charged and everything on the list we where not allowed to be charged for we were. What can we do about this now? And is this a reason that they got shut down because of over charging vets on things the law said we should not have paid?
Danilo Bogdanovic on Wed, 2nd Sep 2009 2:25 pm
Heather – It was the FHA who played the part in TBW getting shut down. Perhaps the VA was involved, but it hasn’t been made public. As for getting overcharged, I would contact the VA and a real estate lawyer about your situation.
candace meeks on Wed, 2nd Sep 2009 8:52 pm
I also tried to call serval times and got nothing but “please hold”. I’m glad of them closing maybe BOA will be better 4 me .I got the paper today stating I had been turned over to BOA. Tha only sad part is I’ve already sent my payment for September will it go to the correct place or will they try to say I haven’t paid it. That makes me worry my payment is over a thousand a month.
Danilo Bogdanovic on Sat, 5th Sep 2009 9:36 am
Candace – If it were me, I would check my bank statement looking for the cashed check. If I didn’t see that it was cashed by the time the next mortgage payment was due, I would contact BoA. But that’s just me…
m smith on Thu, 10th Sep 2009 1:43 pm
TBW getting thier doors shut…. WTF??? what took so long? I was Q.C. /fraud underwriter with TBW. TBW should have been shut down in 2006. Everyone has a skeleon or two in the closet, Farkas has warehouses full of bones. What a mess. The only reason TBW lasted this long, they werw a privately held company. You can keep bones buried for a long time that way.
jim on Fri, 25th Sep 2009 9:08 am
I had my mortgage with TBW and was quite confortable with a private bank rather than one of the big New World Order choke holders like Bank of Amerika. Now this mess comes about I’m pretty ticked off. I went to the court house county recorder and they still show TBW as the lien holder of my property. I DO NOT acknowledge BoA as having any right to request payment from me, nor especially have any right to foreclose on my property because they are not the lien holder. (If “lien” is they proper term)
Ann on Thu, 22nd Oct 2009 5:34 pm
I had TBW for a mortgage company and had no problems with them whatsoever. Now that Bank of America has taken over the mortgage,however, they send me a letter every month saying I am one month behind, which I am not, and do not send my payment coupons until after the payment is already due.Then to top it off they want $30 to pay it over the phone. I had no idea they had even taken over my loan until after the September payment was already due, only to find out I was supposed to send them the August payment. The check for the August payment had already been cashed by TBW, and the government has frozen all assets belonging to them. Bank of America needs to pull their head out of their a*& and get it together. I would gladly go back to TBW if given the choice, of nothing else than to save my own sanity.
mira on Sat, 14th Nov 2009 6:46 am
BOA did the same thing to me. I made my Sept payment to TBW and received a harrassing call from BOA in late Sept threatening to take me to collections for non payment. The funny thing is I had BOA checking and proof of the payment. Next I got a letter from BOA saying that I had no insurance and they would OVERcharge me $614 for insurance AND lock me in for a year unless I showed them with proof! Needless to say…I was PISSED. Why didn’t BOA do their research before harrassing me? I hate mega banks…their customer NONSERVICE sucks!
jim on Sun, 7th Mar 2010 10:17 am
Send BOA this letter…
I am responding to a notice dated August 21, 2009 and a notice dated October 6, 2009 mailed to my address with a referenced loan number of _________ and referenced property address of ______________________
The correspondence appears to claim that I have an account with and owe a mortgage payment to Bank of America and/or BAC Home Loans Servicing, LP.
Please produce for my personal records and inspection within ten (10) days of the date of this letter, certified copies of: any and all original mortgage documents, original assignments thereof, any and all original promissory notes and original assignments thereof, signed by me, ___________, and owned by Bank of America and/or
BAC Home Loans Servicing, LP. Please note that an electronic copy, a copy of an electronic copy, or a certified copy of an electronic copy will not meet my request of a certified copy of an original document.
Good Faith
Personal Promissory Note
I, ___________, the Maker of this Good Faith Personal Promissory Note, promises to pay Bank of America and/or BAC Home Loans Servicing, LP, Payee, any and all validated payments due Payee, within ten (10) days of James M. Moder authenticating all documentation received that is requested herein.
As proof of Maker’s promise to pay any and all validated payments due Payee,
the following is his surety bond:
I, Maker, have chosen to live in the State of Ohio, and the United States of America.
I, Maker, will not be leaving my home, my state or my country, to escape any and all
validated payments due Payee.
I, Maker, am simply, in good faith, seeking the truth regarding this matter.
Before the Almighty God and under His statutes, I, Maker, declare that my Good Faith Personal Promissory Note comes with my statement that I, Maker, declare under penalty of perjury, the foregoing is the truth and my promise to pay is then truthful. God Bless America. All rights reserved. This document has been prepared by
_____________
My experience with this is that they could only send me printed out on letter size (not legal size) “printed out scanned images” of those documents, and no proof of assignment was produce for my inspection. They received this letter Nov 5, 2009 and it is now March 2010, I checked my Credit Report and TB&W is showing as paid off in full, and no other loan is listed, especially BOA !!!
In brief, BOA didn’t get any official “assignment of Note”
MERS actually holds the mortgage.
BOA Can’t produce the original NOTE.
In order to foreclose, the lender has to hold both the NOTE and the MORTGAGE (the security instrument)
Most likely your mortgage is held by MERS also.
They have no standing to foreclose, and they know it.
I will be free and clear of a 167,000 alleged loan, and so can you.
Amy on Thu, 6th May 2010 6:14 pm
Wanted to know what you thought would be the likelihood of this mortgage company not doing or signing the Promissory Note? They sold my loan to central mortgage in January…
Danilo Bogdanovic on Fri, 7th May 2010 2:31 pm
Amy,
Whether they sign a Promissory Note is decided on by the mortgage company on a case-by-case basis. It depends on a lot of things including their policies and the laws in your state.
Amy on Fri, 7th May 2010 3:07 pm
I know that they have to sign a promissory note but was just wondering where they were already fraudulent maybe they skipped this sep as well.
michael dykhorst on Sun, 16th May 2010 4:41 pm
danilo are you realted to sladan bogdanovic of chicago grew up in salt lake city mulitin bogdanovic is his father
Danilo Bogdanovic on Tue, 18th May 2010 12:11 pm
Michael – Not that I know of. The last name is pretty popular in former Jugoslavia and many fled to Canada and the U.S. during WWII.
Theresa on Thu, 8th Jul 2010 9:54 pm
What do I do when BOA is saying that we owe them late fees awhile house payment, and missing escrow because of our aug payment made to taylorbean right before the transition. They won’t reason and I have faxed proof of every payment made? Please send some advise my way , T
Danilo Bogdanovic on Wed, 14th Jul 2010 10:35 am
Theresa – I have heard of that happening to others, but not sure what to do. You’ve probably searched Google for threads on this before – doing that and speaking with a lawyer are probably your best bet. Sorry I couldn’t be of more help.