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Florida Company Reaches Multi-state Agreement Over Non-traditional Loans

""Taylor Bean & Whitaker Mortgage Corp."":http://www.taylorbean.com (TBW), a wholesale lender based in Ocala, Florida, has agreed to pay 13 states and the District of Columbia $9 million in fines after regulators took a closer look at the company's nontraditional mortgage loans made in 2006.
The examination alleged TBW, currently one of the 10 largest wholesale mortgage lenders in the United States, altered borrowers' income and asset information in order to qualify applicants for mortgage loans they couldn't afford and put them into so-called exotic loans, such as interest-only mortgages, payment option adjustable-rate mortgages, and stated income loans.
According to a statement from the ""Massachusetts Division of Banks"":http://www.mass.gov/xpageID=ocapressrelease&L=4&L0=Home&L1=Government&L2=Our+Agencies+and+Divisions&L3=Division+of+Banks&sid=Eoca&b=pressrelease&f=20090622_DOBtaylorbeanwhitaker&csid=Eoca, one of the regulators involved in the inquiry and the ensuing settlement, TBW has agreed to adopt the federal government's Making Home Affordable guidelines to modify mortgages for its borrowers who are having trouble making their monthly payments.
The company has also consented to hire an independent investigator to conduct a more detailed review of all nontraditional mortgage loans the lender originated from 2006 to 2007. The investigating firm will then make a determination if additional reimbursement to consumers is warranted. Under the agreement, TBW will also implement stronger internal compliance controls.
As for the company's $9 million concession, half will be apportioned equally to the 14 jurisdictions that completed the initial examination. The remaining amount will be dedicated to the ongoing development and maintenance costs of the Nationwide Mortgage Licensing System (NMLS).
The Massachusetts governor's office said regulators' past concerns over TBW's underwriting standards, compliance with lending laws, and risk management practices led TBW to stop offering nontraditional mortgages in early 2007.
The states involved in the agreement include Arizona, Florida, Georgia, Idaho, Illinois, Louisiana, Maryland, Massachusetts, Mississippi, New Jersey, North Carolina, Pennsylvania, and Vermont, as well as the District of Columbia.
Similar examinations and allegations against other companies are expected to begin surfacing as state mortgage regulators join forces to combat the predatory lending practices that exacerbated the housing crisis.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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