The Department of Housing and Urban Development has temporarily suspended Taylor, Bean and Whitaker Mortgage Corp., from making new Federal Housing Administration loans and seized the company's $25 billion Ginnie Mae servicing portfolio pending the completion of an investigation by the HUD Inspector General.
Ginnie Mae also terminated the Ocala, Fla., wholesaler as an issuer in its mortgage-backed securities program. "FHA and Ginnie Mae are imposing these actions because TBW failed to submit its 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," HUD said.
FHA commissioner David Stevens noted that TBW also failed to disclose it was the target of a multi-state examination and falsely certified that it had not been sanctioned by any state. "FHA won't tolerate irresponsible lending practices," Mr. Stevens said.
TBW was expected to make a $300 million investment in Colonial BancGroup Inc., Montgomery, Ala., before that deal was suddenly called off. Colonial is under investigation by the special IG for the Troubled Asset Relief Program. TBW had not return phone calls by press time.
The wholesaler is the third largest direct endorsement lender of FHA-insured loans and the eighth largest issuer of Ginnie Mae MBS.