Mortgage Video & Blogging Community

Last Wednesday morning (August 5th), I received the following notification via Twitter from HUDFHA:

“FHA SUSPENDS TAYLOR, BEAN & WHITAKER MORTGAGE CORP read more: http://bit.ly/cU118 /”

Upon following the provided link,  I found the HUD News Release explaining that FHA suspended Taylor, Bean and Whitaker Mortgage Corporation because, as FHA Commissioner David Stevens explained,

“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.”

Many people have never hear of Taylor, Bean & Whitaker and do not understand why this is such a newsworthy event.  They should learn and consider the following facts:

• Taylor, Bean & Whitaker was a top 10 wholesale mortgage lending firm with annual production volume exceeding $30 billion and total assets exceeding $3 billion.
• Taylor, Bean & Whitaker had been the fifth largest issuer of GNMA securities.  GNMA provides guarantees on mortgage-backed securities backed by federally insured or guaranteed loans, mainly loans issued by the Federal Housing Administration, Department of Veterans Affairs, Rural Housing Service, and Office of Public and Indian Housing. Ginnie Mae securities are the only MBS that are guaranteed by the United States government.

Taylor Bean & Whitaker was a major player in the mortgage broker loan distribution channel.  The suspension of their operations has a significant impact on the stream of loans funded by mortgage brokers.  This is important because the majority of loans funded over the past 5 years were originated by mortgage brokers.

In a statement issued last week, The National Association of Mortgage Brokers (NAMB) expressed its concern over the loss of Taylor, Bean & Whitaker as a major channel for wholesale funding of loans.  NAMB President Jim Pair, CMC, issued the following statement in response to this critical change in the market:

“Losing one of the largest wholesale mortgage lenders as a channel for funding has already triggered a ripple effect throughout the industry, canceling tens of thousands of loan approvals and severely harming the consumer.  Taylor, Bean and Whitaker’s failure to fund its pipeline of loans will cause consumers to be left waiting as originators attempt to transfer loans. “

In addition to the closing of Taylor, Bean & Whitaker, the NAMB mentioned other obstacles that are causing time constraints in the FHA loan closing process.  These are the Home Valuation Code of Conduct (HVCC) and the new disclosure requirements under Regulation Z of the Truth in Lending Act (TILA) implemented by the Mortgage Disclosure and Improvement Act (MDIA) that took effect July 30, 2009

If you are currently in the process of obtaining an FHA loan with a mortgage broker, you should call your loan officer and ask them if it was being underwritten by Taylor, Bean & Whitaker.  If that is the case, then you will have to start over either with your existing loan officer or any other of your choice.  This can be especially damaging to you if you are relying on FHA financing to purchase a home as the delays could push you past your close of escrow date.

Please contact me if you have any questions.

Steve Lines
FHA Mortgage Specialist
Cell: 480-329-3346
email: slines@bestFHAlender.com
www.bestFHAlender.com
http://twitter.com/stevelines
Academy Mortgage
Mesa, Arizona