The loss of Taylor, Bean and Whitaker Mortgage Corp. as a wholesale lender is a major blow to U.S. mortgage brokers — who say it means loan applicants who were in process at the wholesaler will need to purchase new appraisals and potentially sit through new waiting periods.
Taylor Bean disclosed Tuesday that it lost its FHA approval and that its Ginnie Mae servicing portfolio was seized. Then it surprised its customers Wednesday with a notice indicating it ceased originating, closing or funding any loans.
In a news release today, the National Association of Mortgage Brokers called the Ocala, Fla.-based lender “a major channel for wholesale funding.”
“Losing one of the largest wholesale mortgage lenders as a channel for funding has already triggered a ripple effect throughout the industry, canceling tens of thousands of loan approvals and severely harming the consumer,” NAMB President Jim Pair said in the statement. “Taylor, Bean and Whitaker’s failure to fund its pipeline of loans will cause consumers to be left waiting as originators attempt to transfer loans.”
Pair went on to say that new appraisals will need to be ordered for borrowers who transfer to another wholesaler as a result of requirements under the Home Valuation Code of Conduct.
“The lack of portability caused by the HVCC, coupled with already slow turnaround times, will undoubtedly prolong the process to obtain a home or refinance,” he added.
The Washington, D.C.-based trade group is calling for the immediate repeal of the HVCC so the loans can be transferred without additional appraisal costs to the borrowers.
NAMB also called on the Federal Reserve to clarify how waiting periods and new disclosure requirements under the Mortgage Disclosure and Improvement Act will impact unfunded Taylor Bean loans.
“The issue of Taylor, Bean and Whitaker has shed more light on problems in the marketplace,” Pair stated. “Together, the HVCC and the MDIA disclosure requirements are causing unintended consequences and slowing a housing recovery. NAMB will continue to work to ensure the consumer will not be hindered or delayed.”
