For Immediate Release - August 10, 2009

Division of Banks Announces Action against Taylor, Bean & Whitaker

BOSTON - August 6, 2009 - Today, the Division of Banks issued a cease-and-desist order against Taylor, Bean & Whitaker Mortgage Corporation, one of the largest wholesale lenders in the country.

On Tuesday, Aug. 4, the Federal Housing Administration announced that it had suspended Taylor Bean from originating any FHA-insured mortgages after allegations of financial misrepresentation and the failure to disclose a multi-state settlement agreement which included Massachusetts.

For the first six months of the year, Taylor Bean was the third-largest originator of FHA-insured mortgages. In addition, on Wednesday, Aug. 5, Freddie Mac, a government-backed investor of mortgage securities, announced that it had also suspended Taylor Bean. As a result, TBW yesterday announced that it would not close or fund any additional mortgages, including loans in its pipeline.

The Division has learned that Taylor Bean has closed some loans in Massachusetts but has failed to fund them. The Division acted to prohibit Taylor Bean from accepting new applications due to serious concerns relative to the company's financial condition and to protect Massachusetts consumers from any further harm. The Division's order requires the company to either immediately fund all closed and approved loans on the committed terms, or place all remaining loans with a qualified lender with no loss to consumers.

Taylor Bean is a licensed mortgage lender located in Ocala, Fla., with nine additional licensed locations, including one in Massachusetts in Braintree.

Today's action by the Division against Taylor Bean was coordinated with several state bank and mortgage regulators across the country.

Resources for Consumers

In anticipation of the number of customers impacted by the closing of Taylor Bean, the Division has been working with representatives of the mortgage lending industry to identify mortgage lenders and mortgage brokers willing to take former customers of TBW.

If a consumer has a pending application with Taylor Bean, they are urged to contact their mortgage broker, if applicable, to place the loan with a qualified lender. Alternatively, consumers can call the Division's Mortgage Hotline at ( 800) 495-2265, Ext. 1501.

"I would encourage individuals to call the mortgage hotline," said Commissioner of Banks Steven L. Antonakes. "The Division of Banks is working with other licensed mortgage lenders and mortgage brokers in Massachusetts to help consumers affected by the problems with Taylor, Bean and Whitaker."

In addition, anytime a consumer believes they have been a victim of unfair or deceptive practices in a residential mortgage transaction, they should call the Mortgage Hotline.

Today's order follows a settlement agreement on June 22 with Taylor Bean and 14 state mortgage regulators, including the Division, as a result of Taylor Bean's poor underwriting standards, compliance and risk management practices, and internal control procedures with regard to non-traditional mortgage loans. The Division fully expects that the loan modification provisions of the settlement agreement will be honored by Taylor Bean or any successor.