2009-08-04 — wsj.com
The Federal Housing Administration Tuesday suspended Taylor, Bean & Whitaker Mortgage Corp. from making loans insured by the federal agency, knocking out one of the biggest FHA lenders at least temporarily.
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RCB at 03:47 2009-08-05 said:
Its about time someone starting looking into TB&W practices, they can only lose a file so many times before people start catching on. PermalinkDo_the_math at 09:36 2009-08-05 said:
What I'm curious about is how their wholesale and retail originations are reported under HUD Neighborhood Watch. I'm only seeing 4166 originations for the last two years under Taylor Bean HUD ID # 74991, and their compare rate is only 3.62%. Seems unlikely since they are supposed to be the 10th largest wholesaler, and TPO's tend to have a higher FHA default rate. They ramped up on FHA in 2007 and 2008, and as we know, this period had significant value declines which further contributes to higher default rates. TPOs and declining values don't translate into lower default rates, and that volume makes no sense if they were the 10th largest wholesaler. I checked other DBA's, and it only added under 2,000 loans- and again- default rates that are well below the national average. So I look at the lenders who they are acting as Principals for, and again, I still can't find the production. However, since loans are closed in the principal's name, the production should count under Taylor Bean's name and ID. So next I look at authorized agents, and I see they are the authorized agent for over a 1,000 companies. Frankly, I'm not ambitious enough to check the production and compare rates for 1,000 companies. But, I take this as an obvious clue. Next, I look at servicing, and low and behold, 10.10% of the loans they are servicing are 90 days plus. However, when you look at the delinquency/default rate of loans they are servicing by originator- surprise, surprise... 14 of their top 20 originators have double digit default rates. 9 of the top 20 originators have default rates over 12%, and 6 of the top 20 originators have default rates between 15% and 25%. However, this appears to be par for the course for the major servicers and is not necessarily a black eye for originators considering the incentives for servicers for delinquent/defaulted loans. Nonetheless, based on the higher FHA servicing default rates, I am hard pressed to swallow a national default and claim rate of only 4.52% for FHA. No matter how you slice it, loss of FHA and GNMA approval in one svelte swoop is certainly an opener. I would definitely appreciate any insight on TBW's actual FHA default rate because I am not buying 3.62%. Permalinkadd a comment | go to forum thread
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