State takes action against Taylor, Bean Whitaker Mortgage by MichaelChoate


									  Illinois Department of Financial
  and Professional Regulation                                     NEWS
   FOR IMMEDIATE RELEASE:                                    CONTACTS:
   August 27, 2009                                           Susan Hofer                   (312) 814-8197
                                                             Louis G. Pukelis              (312) 814-0778

 State takes action against Taylor, Bean & Whitaker Mortgage
Corporation for continued problems in its mortgage businesses
             IDFPR levies $40,000 in fines and orders company to
       cease-and-desist loan servicing and origination activities in Illinois
   CHICAGO – The Illinois Department of Financial and Professional Regulation (IDFPR) has taken
   action against Florida-based Taylor, Bean & Whitaker Mortgage Corporation (TBW) and one of its
   affiliates for persistent mismanagement of its loan servicing and origination activities affecting more
   than 25,000 consumers in Illinois.

   “Homeowners should be able to rely on the company to whom they send their mortgage
   payments,” said IDFPR Acting Secretary Brent E. Adams. “When the Department receives
   indications that such reliability cannot be expected, we will act to restore order.”

   IDFPR’s actions against TBW today included:

   •   Fined $20,000 for erroneously mailing more than 15,000 letters notifying borrowers that their
       loans were more than 30 days past due and that it may be in the borrower’s best interest to seek
       approved housing counseling and advising of further rights under the State’s Homeowner
       Protection Act. As a result, the Department’s call center recorded more than 900 telephone call
       complaints and inquiries.
   •   Ordered to cease and desist all origination activities under the State’s Residential Mortgage
       License Act after TBW received notification on August 4, 2009 from various federal agencies
       terminating and/or suspending TBW as an approved seller and/or servicer of the federal agencies.
   •   Ordered to cease and desist all servicing activities and to take certain actions including but not
       limited to:
           o Providing the Department a list of all residential mortgage loans currently serviced by
               TBW in Illinois;
           o Ceasing and desisting from commencing or proceeding with any foreclosures against
               property in Illinois until further notice;
           o Placing consumer payments in an escrow account separate and apart from any company
               operating accounts;
        o Initiating internal controls for its servicing department including involving a third-party
           independent contractor to oversee implementation of the guidelines and daily operations;
        o Negotiating with any new servicer a 60-day grace period for consumers in the event a
           consumer sends his mortgage payment to TBW instead of the new servicer by mistake,
           so the consumer will not be charged a late fee and the late fee will not be reported to the
           credit bureau by the new servicer.
•   Fined TBW affiliate, First Mortgage Options Corporation, $20,000 for failing to properly notify
    the Department of ceasing operations and for failure to properly surrender its license.

Today’s actions come on the heels of a $9-million settlement approved by Illinois and 13 other states
this past June. That settlement followed an examination of TBW to determine compliance with
laws and regulations pertaining to nontraditional mortgage loans. The examination determined
significant weaknesses in TBW’s operations relative to underwriting standards, compliance and
risk management practices, and internal control procedures related to its “alternative” or “exotic”
mortgages, including “interest-only” mortgages, “payment option” adjustable-rate mortgages, and
stated income loans.


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