Amid FHA allegations of fraud, CEO shuts down Ocala's Taylor Bean mortgage business
Wake up and good morning. The tale of the fall of Ocala's Taylor, Bean & Whitaker Mortgage Corp. gets more bizarre each day.
Why do we in Tampa Bay even care about a mortgage business in Ocala? For three good reasons.
* First, when Taylor Bean closed its doors Wednesday, more than 1,000 employees were suddenly out of work including many who live just north of Tampa Bay. For modest-sized Ocala, it's an extra painful economic blow that business leaders there called "pretty shocking."
* Second, Taylor Bean had come out of nowhere to promise a rescue of $300 million in fresh capital to Colonial Bank, a $26 billion Alabama bank with nearly 200 branches in Florida -- nearly two dozen of them across the Tampa Bay area. That deal fizzled away last week but had it gone through, this Ocala mortgage company would have effectively controlled giant Colonial.
* Third, Taylor Bean, while no household name, was in fact one of the top 10 wholesale mortgage lenders in the country. It oversaw more than $30 billion worth of business annually and was the third largest lender underwriting Federal Housing Administration-insured loans. Which explains why it would have the potential clout to swoop in and invest heavily in Colonial.
On Monday, Taylor Bean's headquarters was raided by the FBI and federal agents for the FHA. The raid was prompted by evidence of mortgage fraud, according to the FHA. Taylor Bean started unraveling when federal Housing and Urban Development (HUD) officials noticed that FHA-insured loans underwritten by Taylor Bean were defaulting at a significantly greater rate than those of FHA's other borrowers. Read more details from the Ocala Star Banner story.
On Wednesday, Taylor Bean chairman Lee Farkas apparently had had enough. An email he sent Wednesday to employees was forwarded to the Star Banner. The email's subject line: The saddest day of my life. Here's what it says:
"Today will be the last day of operations for TB&W. I have done everything possible to try to save it, but I couldn’t. Since 1991, we have provided excellence in mortgage banking. We did our best for a very long time.
"I apologize to everyone.
Everyone except those specifically designated as "essential employees" will be terminated today. Payrolls through today are currently being processed. Additional information with respect to employee benefits will be sent as soon as possible."
Who is Lee Farkas? Here's what he told Ocala magazine in a profile Q&A this summer:
"I came here penniless after living in St. Thomas in the Virgin Islands to help someone sell a troubled subdivision in Marion County. After I got here, I was too poor to go anywhere else. So, I started building houses for retirees which was somewhat disastrous. Then, in 1990, I bought Taylor, Bean & Whitaker and grew it after a few first tough years."
As for the FHA, in addition to suspending Taylor Bean's ability to make FHA loans, the agency also recommended that two top company officials be temporarily banned from doing mortgage business with the federal government. The FHA alleges that Taylor Bean President Ray Bowman and CEO Paul Allen submitted false or misleading documents to HUD. More on that in this Star Banner story.
-- Robert Trigaux, Times Business Columnist