The Federal Housing Administration suspended Taylor, Bean & Whitaker Mortgage from taking loans insured by the agency, and raised questions about the company’s business practices and financial disclosures said the Wall Street Journal.
The move came a day after federal investigators raided Taylor Bean headquarters and could hamper the company’s operations and deal a setback to hundreds of mortgage brokers and community banks that originate loans through Taylor Bean.
The Ocala, FL based lender didn’t originate any retail reverse mortgages but it had a small wholesale operation where it sponsored 117 HECMs YTD according to HUD data.
According to a statement from HUD, FHA and Ginnie Mae are imposing these actions because TBW 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 certain irregular transactions that raised concerns of fraud. FHA’s suspension is also based on TBW’s failure to disclose, and its false certifications concealing, that it was the subject of two examinations into its business practices in the past year.
"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.
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."