Wednesday, August 5, 2009

FHA Game Changer

Aug 5, 2009, 11:56 am. This just in, from one of our favorite lenders – mortgage broker Kevin Reiser of AmeriFirst Lending:

The FHA loan game is going to change completely. Mortgage giant Taylor, Bean & Whitaker just lost their FHA funding accreditation. They are:

  • the 3rd largest FHA lender in the US

  • the nation’s largest FHA 203k lender

  • the largest FHA funding source for mortgage brokers in the country

So what?  This is big setback for mortgage brokers and will change the game completely for buyers seeking FHA funding. Now those buyers must increasingly turn to bankers (rather than brokers) for their FHA mortgage funding. Brokers won’t be able to fund your FHA mortgage anymore, unless they get a different funding source than the biggest Big Boy out there.

Updated 7:05pm, Wed Aug 5:

How Big Is TBW? -- "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. Among originators of FHA loans, Taylor Bean was the third largest in May, with a market share of 4%, according to the publication. Only Bank of America Corp. and Wells Fargo & Co. were larger." (quoted from Calculated, link below)

Calculated Risk reports on TBW - (excerpt/quote) the suspension was put in place because "TBW failed to submit a required annual financial report and misrepresented that there were no unresolved issues with its independent auditor even though the auditor ceased its financial examination after discovering certain irregular transactions that raised concerns of fraud."

Mortgage News Daily reports on the TBW situation - The snippet that caught my eye was this, "Regrettably, TBW will not be able to close or fund any mortgage loans currently pending in its pipeline." Yikers! If you're a home buyer using an FHA loan to purchase, and you're in escrow right now, and you used a mortgage broker to get your loan, call him or her immediately to find out if TBW was the broker's funding source! Your escrow might get very wonky, very quickly.

NPR reports on TBW - (excerpt/quote) "HUD wants the executives barred from conducting business with the government for 18 months."

TBW is a Florida based company. Local paper The Orlando Sentinel's report on Taylor Bean Whitaker -  They named Bank of America and Wells Fargo as financing alternatives, as did several other sources.