Taylor, Bean & Whitaker Ordered to Cease Foreclosures

The Florida Office of Financial Regulation (OFR) on Friday issued an order to Taylor, Bean & Whitaker Mortgage Corp. (TBW) to cease and desist processing foreclosures and charging late payment fees. The order comes on the heels of a first cease-and-desist order issued August 7. OFR said TBW did not comply with some provisions of the first order, including a requirement to attempt to obtain funding or move loans out of its pipeline, and a request to provide relevant financial information for the assessment of its financial condition. OFR said it also found that Taylor, Bean & Whitaker used a single bank account for all its operations — a violation of Florida statutes — also depositing operating funds and custodial funds into this account and paying employees from it. Taylor, Bean & Whitaker claimed the the accounting of different funds was done internally, but OFR said the intermingling of funds “represents a serious risk to Florida consumers.” TBW’s two attempts to secure accounts at other financial institutions were denied, and OFR said TBW’s outside counsel on Friday indicated the company’s imminent bankruptcy. In light of Taylor, Bean & Whitaker’s continued financial distress and failure to follow the initial cease and desist, OFR issued the order to cease foreclosure proceedings currently conducting or contemplating. OFR also ordered TBW not to charge late fees to Florida consumers on payments received after July 15 and not report any Florida consumers to a credit bureau for any payment made from August 1 through 60 days following the date of the order. OFR’s order (which can be downloaded here) sets up a time line to unwind servicing rights of 34,922 private portfolio loans on other servicers within 60 days of the order. It also calls for TBW to provide daily reports on serviced loans and promptly forward payment checks to new servicers. TBW for weeks experienced some delay processing payments from borrowers, and HousingWire received a handful of e-mails from concerned customers that wondered why their automatic debit payments had not cleared and asked whether they would be considered delinquent if TBW did not process them on time. The company on August 14 told borrowers it will no longer accept online payments or automatic payment deductions on mortgages it still services. In fact, Taylor, Bean & Whitaker has processed no automatic debit payments since August 4 and asked its borrowers to submit payments via direct mail. Write to Diana Golobay.