One mortgage co another causalty:
Taylor, Bean & Whitaker Mortgage Corp. Announces Chapter 11 Filing
2:05p ET August 24, 2009 (Business Wire)
Taylor, Bean & Whitaker Mortgage Corp. announced today that it has filed for relief under Chapter 11 of the U.S. Bankruptcy Code. The filing follows a series of events in recent weeks that have crippled the company's business operation.
On August 3, 2009, the Federal Housing Administration suspended Taylor Bean's authority to issue FHA-insured loans, which was immediately followed by notices from the Government National Mortgage Association (Ginnie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) suspending Taylor Bean as an issuer of mortgage-backed securities and mortgage seller/servicer. These agencies immediately transferred servicing from Taylor Bean to other providers.
Taylor Bean appealed the Freddie Mac termination and intends to appeal the HUD and Ginnie Mae terminations later this month, but has no way to continue normal business operations in the interim. Therefore, the company was forced to abruptly lay off about 2,000 employees on August 5, 2009.
The company believes that these events are related to various investigations surrounding the failure of Colonial Bank, which for years was Taylor Bean's primary bank. On or about August 6, 2009, approximately 100 Taylor Bean bank accounts were frozen by Colonial Bank. This action created myriad problems in processing borrower payments and making payments on their behalf - such as homeowner's insurance premiums and real estate taxes.
Taylor Bean is currently in discussions with the FDIC, the receiver for Colonial, in hopes that this circumstance can be remedied immediately and so that individual borrowers are not affected further by Taylor Bean's inability to access its Colonial bank accounts.
These events also resulted in the issuance of cease and desist orders and other administrative proceedings by numerous state regulators. Taylor Bean has been in ongoing discussions with these regulators since early August and hopes that these can be resolved in the near future.
As a result of these events and the impact on Taylor Bean's business operation, the company today filed for Chapter 11. Under Chapter 11, Taylor Bean will operate on a scaled-down basis and begin the work of recovering, restructuring and possibly liquidating its assets. The Chapter 11 case will be administered before the United States Bankruptcy Court in Jacksonville.
Taylor Bean also announced that the business will be directed by two newly appointed independent directors: Bill Maloney and Bruce Layman, both of whom have extensive experience in restructuring distressed businesses. This new board has appointed Neil Luria of Navigant Capital Advisors as Chief Restructuring Officer. The company's previous board and management team worked closely with the Office of Thrift Supervision to obtain expedited, conditional approval of Messrs. Maloney, Layman and Luria.
"This is a very complicated business, and the speed of its collapse has been stunning," said Mr. Luria. "We are very appreciative of the efforts of the members of management and other company employees, along with a large team of professionals, who have worked tirelessly under very stressful circumstances to make today's filing possible. Much remains to be done, but we are committed to creating and realizing the value of the company's assets."
ABOUT TAYLOR, BEAN & WHITAKER:
Taylor, Bean & Whitaker Mortgage Corp. is a 27-year-old company that grew from a small Ocala-based mortgage broker to become one of the largest mortgage bankers in the United States. In 2009, Taylor Bean was the country's third largest direct-endorsement lender of FHA-insured loans of the largest wholesale mortgage lenders and issuer of mortgage backed securities. It also managed a combined mortgage servicing portfolio of approximately $80 billion. The company employed more that 2,000 people in offices located throughout the United States.
