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FHA is NOT the new subprime
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The Federal Housing Administration (FHA) will suspend any lender from making FHA loans if it questions company's business practices or financial disclosures. On Monday the Department of Housing and Urban Development (HUD), which oversees the FHA, said it took action against (Taylor Bean & Whittaker mortgage company) because the company failed to submit a required annual financial report and to disclose "certain irregular transactions that raised concerns of fraud." Officials declined to provide details about the possible fraud. Taylor Bean has 30 days to appeal the suspension.
Taylor Bean, a privately owned company which originated and purchased nearly $30 billion in mortgages last year is the largest lender ever to be suspended from FHA lending. The company is the 12th-largest U.S. mortgage originator and makes most of its home loans through independent brokers and smaller mortgage banks.
The crackdown on Taylor Bean comes as the FHA is straining to cope with an increase in the number of loans it backs and rising delinquencies on those loans. This is a sign the FHA is being vigilant in its efforts to eliminate mortgage fraud. Will Taylor Bean be re-instated with FHA? Keep you posted...
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