American Home Mortgage Servicing Inc. is set to take over a portfolio of loans that had been stuck in limbo since the collapse of Taylor, Bean & Whitaker Mortgage Corp., according to Moody's Investors Service Inc.
American Home, an Irving, Texas, company that has been assembled from assets acquired by Wilbur Ross & Co. LLC during the mortgage crisis, could start servicing the loans this week, Sally Acevedo, a senior analyst with Moody's, wrote in a report published Monday.
The transfer "took two months, following multiple court proceedings," Acevedo wrote, and investors holding $2 billion of mortgage-backed securities were due to miss their third monthly payment on Monday.
Taylor Bean, of Ocala, Fla., filed for bankruptcy protection in August, after a rapid series of events that included a raid of its headquarters and a branch of its warehouse lender, Colonial BancGroup Inc. of Montgomery, Ala., by federal law enforcement agencies. Regulators seized Colonial's bank subsidiary that month and accounts used to service the loans backing the bonds were frozen.
With the stage set for borrower payments to flow through to bondholders once again, American Home now faces the arduous process of reconciling the books, Acevedo wrote. Only then can the health of the pool of loans be assessed. Moody's downgraded formerly Aaa notes backed by the pool to Aa3 last month, and left them under review.
Bank of America Corp. took over mortgages securitized by the Government National Mortgage Association that had been serviced by Taylor Bean. Freddie Mac arranged for servicing of its loans that had been handled by Taylor Bean to be transferred to Cenlar, Morgan Stanley's Saxon Mortgage Services Inc., and Ocwen Financial Corp.
Acevedo wrote that the "ordeal" of the loans being moved to American Home "underscores that the only thing predictable about servicing transfer … is its uncertainty."