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MOP

Big Mortgage Lender In The U.s. About To Go Down?

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Just spotted this on TF:

Zarathustra

E-mail from TB&W...

Sent: Wednesday, August 05, 2009 1:06 PM

To: AllUsers

Today will be the last day of operations for TB&W. I have done everything possible to try to save it, but I couldn’t. Since 1991, we have provided excellence in mortgage banking. We did our best for a very long time.

I apologize to everyone.

Everyone except those specifically designated as “essential employees†will be terminated today. Payrolls through today are currently being processed. Additional information with respect to employee benefits will be sent as soon as possible.

http://www.tickerforum.org/cgi-ticker/akcs-www?post=105653

From their website:

Taylor, Bean & Whitaker Mortgage Corp. (TB&W), headquartered in Ocala, FL is a Top 10 national wholesale mortgage lender. The company was incorporated in 1982 and began operations as a small town retail mortgage firm. Since then, TB&W has ascended to a national mortgage lending institution with offices across the country.

https://www.taylorbean.com/AboutTBW.aspx

I will look out for any news stories that pop up to confirm this.

Edited by MOP

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Another poster has confirmed this rumour now from an email they received:

ANNOUNCEMENT 09-21

AUGUST 5, 2009

INDUSTRY EVENTS

The unfortunate and sudden HUD suspension of TB&W is a significant industry event which will have far-reaching implications. One of those implications is the displacement of the enormous volume TB&W was originating each month, as they were the third-largest FHA lender in the nation. As the industry attempts to absorb this volume, it is likely there will be noticeable disruptions in all areas of production. We believe there will be three main affected areas: (1) Pricing: pricing may increase as a result of the increased volume, since all major lenders are already operating at or above capacity. (2) Risk Analysis: risk tolerance may again decrease as lenders react to this latest headline. (3) Warehouse Availability: increased vigilance by warehouse lenders may result in additional underwriting guidelines, a reduction in underwriting exceptions, and potentially even less warehouse availability than there is now.

Since we are already operating at capacity, we will likely be affected in all three of these areas. Consequently, we are not in a position to underwrite and close any substantial portion of the current or projected TB&W pipeline.

Additionally, Colonial Bank, one of the largest warehouse lenders in the country, was a major source of financing for TB&W. The ramifications of this relationship, if any, have yet to be determined. However, it is important to note that any negative impact on Colonial Bank would likely exacerbate all of the potential issues described above.

http://www.tickerforum.org/cgi-ticker/akcs...5653&page=2

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I wonder if the Dow has priced this failure in?

How much are they lending a month in the US? How big is there mortgage book?

More to this than meets the eye :ph34r:

AUGUST 5, 2009. Wall Street Journal

Taylor Bean Suspended From Making FHA Loans

Move Follows Raid at Lender's Headquarters as Agency Probes Business Practices, Disclosures Amid 'Concerns of Fraud'

The Federal Housing Administration suspended Taylor, Bean & Whitaker Mortgage Corp. from making loans insured by the federal agency, and raised questions about the company's business practices and financial disclosures.

The move, coming a day after federal investigators raided Taylor Bean headquarters in Ocala, Fla., could hamper the company's operations and deal a setback to hundreds of mortgage brokers and community banks that originate loans through Taylor Bean.

The Department of Housing and Urban Development, which oversees the FHA, said it took action against Taylor Bean because the company failed to submit a required annual financial report and to disclose "certain irregular transactions that raised concerns of fraud."

FHA officials said Taylor Bean, which originated and purchased nearly $30 billion in mortgages last year, is the largest lender ever to be suspended from FHA lending.

Among originators of FHA loans, Taylor Bean was the third largest in June, with a market share of 3.3%, according to the publication. Only Bank of America Corp. and Wells Fargo & Co. were larger.

The crackdown on Taylor Bean comes as the FHA is straining to cope with an increase in the number of loans it backs and rising delinquencies on those loans.

On Monday, federal agents raided the Florida offices of Colonial BancGroup Inc. and Taylor Bean. The special inspector general for the Troubled Asset Relief Program said its agents had executed search warrants at the two offices in conjunction with the Federal Bureau of Investigation and the inspector general for HUD. A spokeswoman for the TARP watchdog said the warrants were sealed and she couldn't provide details about the probe.

HUD officials and the TARP watchdog teamed up in the federal investigation when they found they both had concerns about Taylor Bean and Colonial BancGroup.

Colonial's financial problems have stirred worry in the mortgage market because the bank is one of the nation's largest providers of short-term credit to small, independent mortgage banks. These mortgage lenders have found it hard to obtain the short-term loans they need to allow them to fund home mortgages. If Colonial exits the warehouse-lending business, that would be "devastating" for many mortgage banks, said Scott Stern, chief executive officer of Lenders One, a St. Louis cooperative that provides services to about 135 mortgage banks across the U.S.

http://online.wsj.com/article/SB124940991556305327.html

Edited by MOP

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A bit of fraud.

Could be a nice get out of jail card for the US, declare that mortgage companies had operated illegally and abused trust.

Mortgages therefore null and void.

I can see all of this ending up in the courts with borrowers suing lenders etc....

The lawyers are going to get very rich.

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