Tuesday, August 11, 2009

FHA has Fact Sheet for Taylor, Bean, & Whitaker Customers

News Update: Taylor, Bean & Whitaker's instructions to mortgage customers. All WSATA TBW updates here.

Last night I posted that I am one of Taylor, Bean, & Whitaker customers who tried to pay her mortgage and could not. The mortgage lender has gone out of business after backing out of its deal to bail out Colonial Bancgroup Inc. Following that, Federal agents raided TBW's offices in Florida, and on Wednesday of last week, TBW, which services FHA loans, shut its doors with plans to file for bankruptcy.

The Federal Housing Administration, FHA, has posted a fact sheet or FAQ, "FHA-insured Loans Associated with Taylor, Bean and Whitaker (TBW) Questions and Answers for Consumers." According to the FAQ:
Ginnie Mae’s master sub servicer, Bank of America, will be taking over servicing of the TBW portfolio. You will receive a letter from BAC Home Loans Servicing (a Bank of America subsidiary) confirming this transfer and welcoming you as a valued customer within two weeks of your loan being added to their systems.
The FAQ also tells, TBW customers to keep making payments to TBW; however, as many of its customers realize, the website will not accept payments. Other customers report that the bank has not withdrawn mortgage payments from their accounts that they set up on automatic draft. The concern is naturally that this TBW mess will hurt credit ratings. Credit report errors are a pain in the rear to resolve. Since I first wrote about the FAQ, HUD/FHA has updated it again.
Update: You should continue making your mortgage payment at its normally scheduled time. However, your payment should
now be sent to:
    BAC Home Loans Servicing, LP
    Payment Processing
    P.O. Box 10334
    Van Nuys, CA 91410‐0334
Please use your TBW loan number until you are notified in writing by BAC Home Loans Servicing of your new loan number. You will receive a letter from BAC Home Loans Servicing confirming your loan transfer and welcoming you as a valued customer within two weeks of being added to their systems. If you have additional questions about servicing your loan, you may contact Bank of America Home Loans Customer Service at 1‐800‐669‐6607 from 5am to 6 pm PST Monday‐Friday. (From FHA FAQ updated today.)
Much of the information in the FAQ is geared toward helping people who were in the process of closing mortgages with the lender or people who were headed toward foreclosure or behind on payments. It seems TBW carried a lot of high-risk mortgages.

In an August 4th HUD press release, the FHA explains why it suspended TBW from servicing FHA loans and will "sanction" two of its top executives:
WASHINGTON - The Federal Housing Administration (FHA) today suspended Taylor, Bean and Whitaker Mortgage Corporation (TBW) of Ocala, Florida, thereby preventing the Company from originating and underwriting new FHA-insured mortgages. The Government National Mortgage Association (Ginnie Mae) is also defaulting and terminating TBW as an issuer in its Mortgage-Backed Securities (MBS) program and is ending TBW's ability to continue to service Ginnie Mae securities. This means that, effective immediately, TBW will not be able to issue Ginnie Mae securities, and Ginnie Mae will take control of TBW's nearly $25 billion Ginnie Mae portfolio.

FHA and Ginnie Mae are imposing these actions because TBW failed to submit a required annual financial report and misrepresented that there were no unresolved issues with its independent auditor even though the auditor ceased its financial examination after discovering certain irregular transactions that raised concerns of fraud. FHA's suspension is also based on TBW's failure to disclose, and its false certifications concealing, that it was the subject of two examinations into its business practices in the past year.

"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.

FHA Commissioner David Stevens said, "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."

Ginnie Mae President Joseph Murin said, "I would like to reassure TBW's customers whose loans serve as collateral for Ginnie Mae securities that, although this action will result in a new servicer, the transition will be seamless for them."

TBW's immediate suspension is for a temporary period pending the completion of an investigation by HUD's Office of Inspector General, an ongoing review by the Department's Office of Housing, and any legal proceedings that may ensue. TBW is the third largest direct endorsement lender of FHA-insured loans and the eighth largest issuer of Ginnie Mae mortgage-backed securities. FHA decided that TBW's immediate suspension is in the best interest of the public and is necessary to protect the financial interests of the Department.

TBW may appeal its immediate suspension by submitting a written request for a hearing before an Administrative Law Judge within 30 days. Such a request will not delay the action FHA is announcing today.

In conjunction with TBW's suspension, HUD sent notices of proposed debarment to TBW's Chief Executive Officer, Paul R. Allen, and TBW's President, Ray Bowman. Mr. Allen's proposed debarment alleges that he submitted false and/or misleading information to Ginnie Mae regarding TBW's delay in submitting its audited financial reports for fiscal year ending on March 31, 2009. Mr. Bowman's proposed debarment alleges that he submitted two false certifications to HUD on TBW's Yearly Verification Report. Mr. Allen and Mr. Bowman have thirty days to contest the proposed debarments.(FHA news release)
I just checked the TBW website again today. Still, it won'at let me make a payment. The website gives the same message it did before, that the loan is restricted, the same message it's giving everyone who wants to make a payment.

It seems stupid to send mail anything to TBW if it has no employees there to receive that mail. I will mailing my check to the address provided above that was given at the FHA/HUD site.

Last week TBW laid off nearly 1000 workers, some of whom have decided to sue because the wholesale mortgage company failed to give 60 days notice as required by the WARN Act.

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