If you're like most people, you never heard of a company called Taylor, Bean and Whitaker. But they may soon have a very profound effect on your life. Because the FHA loan you think you are approved for and ready to close on may just have disappeared.
The twelfth largest lender in the country, Taylor Bean funded a huge portion of brokered mortgages, including FHA loans. Questionable disclosure and other practices led Fannie Mae to suspend dealing with the company five years ago. In addition, many lenders with wholesale divisions, such as Chase, stopped working with this company years ago.
Recently, The Federal Housing Administration suspended Taylor, Bean & Whitaker Mortgage Corp. from originating loans insured by the federal agency, and raised questions about the company's business practices and financial disclosures. If you got your loan through through a mortgage broker or bank not licensed to do FHA loans on its own, odds are good it's going through Taylor Bean. Or, I should say, it WAS. If you had an approval, you no longer do. If you had a loan set to close, you no longer do. The company has suspended operations on all fronts and its downfall will be a major loss of funding to the hundreds of mortgage brokers and community banks that originate loans everywhere.
And loans will cost more. If small mortgage lenders are unable to do business, "it will mean fewer choices for the consumer and higher mortgage rates," said Glen Corso, a spokesman for the Warehouse Lending Project, a group of about 35 mortgage banks pushing for federal aid to encourage more warehouse lending.
So, what do you do? Call your broker first. Find out what lender is funding your loan and make sure it's still in business. If you have any doubt, run, don't walk, to a direct lender (like a large bank approved to do FHA loans) and get your application in ASAP. If you have copies of everything, you're ahead of the game. If not, get your file from your unfortunate old lender and take it to one that can complete the job.
