Taylor, Bean and Whitaker -12th largest mortgage lender loses FHA approval.

Taylor, Bean, and Whitaker was one the country’s top wholesale lenders serving 100′s of small mortgage shops across the country.

TB&W has 30 days to appeal the suspension but few have won an appeal and the blow will make it almost impossible for the company to fully recover as a major player.

At the core of the move was some reporting irregularities.

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.”

although many would like to think that the mortgage crash was only related to the sub prime world this action show that it was more than sub prime and that the problems are not over like any would like us to believe.

“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.

If you are working for an FHA lender or broker pay attention to the little things.

Is your company making loans that other will not make?

Are you seeing lax disclosure policies and followup?

This story started earlier today with the Feds serving TB&W and Colonial Bank with warrants.

See story.

Also see the official press release from HUD
http://www.hud.gov/news/release.cfm?content=pr09-145.cfm&CFID=19550507&CFTOKEN=91094375

I just read the news that another national net branch company – Global Mortgage Inc. located in Clearwater Florida – has declared CH-7 bankruptcy.

Global like many others in the net branch segment of the industry was plagued with investor buy backs and operations problems that were caused in part to poor management and also from the pain brought on by churning branches.

At one time they had several hundred branches and operated in over 40 states.

My concern is for the branch managers and loan officers who will lose a lot on money in this melt down.

The current problems in the mortgage industry are a lot like the dot com boom and later crash of the 90′s. For a while everyone was running down the road ignoring all of the warning signs – then when they plunged over the cliff everyone was surprised.

Nothing replaces common sense business practices, nothing replaces a little conservatism when it come to financial matters. Most of the net branch companies that have folded exercised little caution when it came to business, they demonstrated little concern for lending rules and regulations.

Most net branch companies closed their doors (imploded) because of the investor buy back requests that hit them like a freight train.

We are growing while others are going into BK.

We have no buy back requests from our investors.

We grow at a controlled rate.

We do not have rapid branch turnover – some of our branches have been with us for over 5 years.

We do not bend or ignore lending regulations to make a dollar.

We support on branch network with solid business management.

I always appreciate subscribers and welcome comments and questions.

For more mortgage net branch information visit: NetOriginator.com