Taylor, Bean & Whitaker Mortgage Corp. announced that it has closed down its mortgage-lending operations.
The privately owned Ocala, Fla.-based mortgage bank cited Tuesday's move by the Federal Housing Administration barring it from making loans insured by the FHA. It also disclosed that it can no longer sell loans to Freddie Mac, the government-backed mortgage investor that has purchased a large share of Taylor Bean's production in recent years.
The Department of Housing and Urban Development, which oversees the FHA, said it took action against Taylor Bean because the company failed to submit a required annual financial report and to disclose "certain irregular transactions that raised concerns of fraud."
Taylor Bean was the nation's 12th-largest home-mortgage lender in this year's first half, according to Inside Mortgage Finance, a trade publication. Taylor Bean did most of its lending through brokers and smaller mortgage banks and was one of the last big mortgage originators that isn't part of a giant commercial banking company. Its closing is a blow to hundreds of brokers and small mortgage banks that sold their loans to Taylor Bean and now will have to scramble to find new partners.
In an email to employees Wednesday, Chairman Lee Farkas said: "Today will be the last day of operations for TB&W. I have done everything possible to try to save it, but I couldn't. Since 1991, we have provided excellence in mortgage banking. We did our best for a very long time. I apologize to everyone."
In a statement later, Taylor Bean said it will not be able to complete or fund any mortgage loan in its pipeline of unfinished mortgages.
The company also said it expects to continue servicing mortgages — collecting payments and handling foreclosures and other administrative tasks — as it "restructures its business in the wake of these events."
The email from Farkas said that all except "essential" employees will be "terminated today."