FAILED LENDER - TAYLOR, BEAN & WHITAKER - Tightens Pool of FHA Loan Funding, Creates Confusion Among Its Customers!

Real Estate Agent with Dean's Team - Keller Williams Realty Partners Chicago IL

Taylor, Bean, & Whitaker. 

The average home buyer has no idea who they are. Change that . . . were!

But their August demise has left many holders of FHA Loans the Mortgage Bank has funded uncertain about where the monthly payments are going.  It also created a scramble for hundreds of borrowers seeking new and refinance loans, as Mortgage Brokers who used Taylor, Bean as a source of funding now had to look elsewhere.

As reported last week by Chicago Tribune Real Estate Writer Mary Ellen Podmolik, the FL-Based Wholesale Lender, writing its loans through a series of mortgage brokers and independent lenders, closed its doors last month, after being cited for possible mortgage fraud by the FDIC.  Taylor, Bean, & Whitaker subsequently sought bankruptcy protection.

According to Mortgage Trade Publication Inside Finance, the firm was the third-largest provider of FHA Loans as recently as last June.  Loans underwritten by the Federal Housing Administration represent the only option for many lower-down payment borrowers today, and those with less-than-perfect credit. 

Across IL, roughly 25,000 mortgage loans have been impacted by the shutdown of Taylor, Bean.  The Illinois Department of Financial and Professional Regulation (IDFPR) is attempting to address homeowner concerns from its orphaned customers throughout the state.  Indeed, the firm has not processed any auto-withdrawal loan payments since early August.  For many of the shuttered lender's other customers, it is not clear who is currently servicing their loan.

Another fear - because of the bankruptcy filing by Taylor, Bean, it is unclear what has happened to money escrowed by its borrowers earmarked to pay property taxes and homeowners insurance.

Look on the Taylor, Bean & Whitaker website, and you'll find a notice indicating that many of the firms loans are being serviced by other banks, including Bank of America, Cenlar FSB, Ocwen Loan Servicing, or Saxon Home Mortgage, depending on the investors on the loan, and whether it is current or not.  However, Taylor, Bean is still servicing nearly 1,800 loans in IL, under the names of its different corporate entities.

IL Regulatory Officials have been told Taylor, Bean has been endorsing mortgage checks it receives over to the new assigned servicer.  For those who have Loan Modification requests in progress, their status is unclear. 

Borrowers have a 60-day grace period on their loan payments after their loan servicer changes.  The State of Illinois has also also ordered Taylor, Bean & Whitaker not to begin any new foreclosures, or proceed with those in progress, for the time being.

IDFPR has set up a Toll-Free Hotline for borrower questions - 800-793-3470.

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Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

What a mess this is!  I do short sales and right now I will not take any belonging to them. Home Owners have got to be really confused!

Sep 12, 2009 07:36 AM #1
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Dean Moss

Dean's Team Chicago IL Real Estate Team
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