DOBI Issues Cease and Desist Order Against Taylor, Bean & Whitaker Mortgage Corporation
TRENTON, NJ – August 7, 2009 – (RealEstateRama) — The New Jersey Department of Banking and Insurance (DOBI) yesterday ordered Taylor, Bean and Whitaker Mortgage Corporation (TBW) to stop doing business in the state and began the process of revoking the company’s mortgage lending license.
The cease and desist order was filed against the Florida-based mortgage lender following actions by the U.S. Department of Housing and Urban Development (HUD), the Federal Home Loan Mortgage Corp. (FHLMC) and the Government National Mortgage Association (GNMA) this week which terminated or suspended TBW from participating as a mortgage seller or servicer for those organizations.
“Our main goals in this order are to shut down Taylor, Bean and Whitaker’s operation in New Jersey, to protect any New Jersey consumers who may have a mortgage application in the pipeline with them and to make sure TBW continues to abide by the terms of the settlement it signed with New Jersey and 13 other states in June,” said DOBI Commissioner Neil N. Jasey.
“Prompt, concerted action by state regulators in cases like this is critically important to the consumer protection mission that is top priority at DOBI,” said Banking Division Director Terry McEwen.
TBW has 21 offices licensed to do business in New Jersey and in 2008 originated 1,962 mortgage loans in New Jersey.
Under terms of the order, TBW must not only cease operations in the state but also ensure that New Jersey borrowers caught in the loan application process when it shuts down are not harmed and placed with viable alternate lenders.
In June, New Jersey DOBI and 13 other state mortgage regulators announced a major settlement with TBW regarding its mortgage lending practices for so-called “non-traditional” loans made in 2006.
“Non-traditional” loans, also referred to as “alternative” or “exotic” mortgage loans, include “interest-only” mortgages, “payment option” adjustable-rate mortgages, and stated income loans.
The multi-state examination that led to the settlement found weaknesses in TBW’s operations in 2006, relative to its underwriting standards, compliance and risk management practices, and internal control procedures. Alleged practices included the multiple submissions of loan applications through automated underwriting programs resulting in altered income and asset information for prospective borrowers in order to qualify applicants for mortgage loans.
Under provisions of the settlement, TBW was required to: implement a loan modification program to make the loans it administered conform to the regulations of the federal “Making Home Affordable” program; hire an independent auditor to review its non-traditional loans in 2006 and 2007; implement a compliance program to ensure its compliance with laws and regulations governing the mortgage business in each of the states and pay the states $9 million to assist in their oversight of mortgage origination practices.
To date, that multi-state settlement has returned about $103,000 in refunds to New Jersey consumers.
Based in Ocala, FL, TBW was one of the 10 largest wholesale mortgage lenders in the United States. According to Home Mortgage Disclosure Act data, TBW originated 215,880 traditional and non-traditional mortgage loans nationally between 2006 and 2007.
Borrowers with concerns about their mortgage should also consult the company’s web site at www.taylorbean.com.
For Further Information:
Ed Rogan or Marshall McKnight (609) 292-5064
