Lender stops funding loans
OCALA (AP) – One of the nation’s largest wholesale mortgage lenders stopped funding mortgages Wednesday, a day after federal authorities barred it from making loans insured by the Federal Housing Administration.
Taylor, Bean & Whitaker ceased all mortgage-origination operations immediately, officials with the firm said in an e-mail to employees and others.
“We understand that this could have a significant impact on our valued employees, customers and counterparties, and are very disappointed that a less drastic option is unavailable,” the e-mail said.
Taylor, Bean & Whitaker expects to continue servicing mortgage loans as it restructures but will not be able to close or fund any mortgage loans currently in the pipeline.
The Federal Housing Administration on Tuesday suspended the firm from originating new FHA-insured mortgages, and Ginnie Mae also terminated Taylor, Bean & Whitaker as an issuer of its mortgage-backed securities program. The termination ended the firm’s ability to issue securities from Ginnie Mae, the government-owned cooperation that provides guarantees on mortgage-backed securities, and the agency planned to take control of Taylor, Bean & Whitaker’s nearly $25 billion Ginnie Mae portfolio.
On Monday, federal agents raided the lender’s Ocala-based headquarters, along with the Orlando office of Colonial BancGroup.
The firm 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 irregular transactions that raised concerns of fraud.