The Federal Housing Administration on Tuesday suspended Taylor, Bean & Whitaker Mortgage Corp. from making loans insured by the federal agency, knocking out at least temporarily one of the biggest FHA lenders.
The FHA said the Ocala, Fla., lender failed to submit a required annual financial report and to disclose to the agency "certain irregular transactions that raised concerns of fraud." Taylor Bean has 30 days to appeal the suspension.
Taylor Bean was the 12th-largest U.S. mortgage lender in the first six months of this year, according to Inside Mortgage Finance, a trade publication. Taylor Bean's woes are a major blow to hundreds of brokers and smaller mortgage banks that sell the loans they originate to the privately owned Florida company.
FHA loans have surged in popularity in the past two years as other sources of mortgage funding have dried up.
Lee B. Farkas, the chairman of Taylor Bean, said in response to questions that he was unaware of the FHA action.
Ginnie Mae, a government agency that guarantees payments to holders of securities backed by FHA loans, said Taylor Bean is also barred from issuing securities backed by Ginnie.
Ginnie said it will take control of nearly $25 billion of mortgage securities issued by Taylor Bean.
The moves came a day after federal agents raided the Florida offices of Colonial BancGroup Inc. and Taylor Bean.
Taylor Bean led a group of investors that proposed to shore up Colonial by taking a stake in the Alabama banking company, but this plan fell through last week amid heavy losses at Colonial.