Taylor Bean Mess - roundup

The FDIC, which is the receiver for Alabama's recently shuttered Colonial Bank, says Taylor Bean is refusing to transfer vital information related to its servicing of mortgage loans.

"As a result, while hundreds of thousands of homeowners continue to make their monthly mortgage payments, those payments are now sitting in limbo," the FDIC said in the court filing...

Taylor Bean, at one time the largest wholesale mortgage lender not owned by a bank, also serviced nearly 500,000 mortgage loans totaling more than $80 billion. The lucrative business involves collecting monthly mortgage payments and disbursing funds to investors.

The FDIC says it believes some $55 million in electronic payments, plus 50,000 checks delivered to a Colonial Bank lock box, haven't been deposited. That amount doesn't include any payments homeowners made directly to Taylor Bean.

The regulator also says it has information indicating that Taylor Bean continues to improperly direct homeowners to send their mortgage payments to an account it opened at Wachovia Bank...

It wants Judge Jerry A. Funk of the U.S. Bankruptcy Court in Jacksonville, Fla., to lift the Bankruptcy Code's automatic-stay provision to force the lender to turn over all records, tapes and undeposited funds related to servicing the loans.

We've received complaints from homeowners who've received letters from two different companies asking for payments to be sent to them. As we dug into bankruptcy filings we discovered this is bigger than we thought. Comingling of funds, checks not deposited, insurance and tax payments not applied.

The former mortgage giant, which once was the third largest mortgage underwriter for the Federal Housing Administration, failed to meet an Aug. 31 deadline if it wanted to petition the suspension of its license to originate loans in Florida....

Taylor Bean’s failure to respond to Florida regulators suspending its license means that the former mortgage warehouse company would have to start from scratch and apply anew if it wanted to get back into originating home loans, said the department’s bureau chief, Andy Grosmaire...

Meanwhile, the clock is ticking for Taylor Bean in regards to a second cease and desist order from Grosmaire, ordering Taylor Bean to unload its remaining 35,000 non government insured loans.

The Aug. 21 order required Taylor Bean to have transferred at least half of its 35,000 remaining mortgages to another servicer by Saturday. The rest of the mortgages are supposed to be transferred to other servicers in a staggered process 45 days after that...

U.S. Bank is asking the court to make Taylor Bean hand over financial information regarding nearly 2,000 mortgages that are owned by U.S. Bank National Association’s clients but serviced by Taylor Bean.

U.S. Bank said in its request, filed Aug. 31, that it needed that information to ensure the transfer of its mortgages, worth about $170 million, to other servicers and to ensure payments associated with those mortgages, such as home insurance bills held in escrow and real estate taxes.

U.S. Bank said it’s been trying to get the information for three weeks but has been mostly ignored.

The misfortunes of Taylor, Bean & Whitaker Mortgage Corp. (TBW) and its warehouse lender Colonial Bank dragged Ocala Funding’s asset-backed commercial paper (ABCP) program into the “vortex” of financial woes, according to commentary Monday by Moody’s Investors Service.

Colonial bank served as bailee for Ocala collateral, but the Federal Deposit Insurance Corp. acting as Colonial’s receiver after the bank failed has yet to release Ocala collateral, putting repayment of Ocala notes in jeopardy, Moody’s said.