Been 'Farkassed'? Amid Segway and roast ostrich, a peek at Taylor, Bean CEO Lee Farkas
Wake up and good morning. The demise of Ocala-based mortgage giant Taylor, Bean & Whitaker is a complex tale of greed, incompetence and regulatory oversight whose ripples will play out for years. The inept handling of Taylor Bean's business since it failed has left thousands of mortgage holders flailing over where to send mortgage payments (and actually have them accounted for) or how to gain access to escrow accounts. Some of that fiasco, notably the jumble of federal and state oversight, will be explained in an upcoming story of the St. Petersburg Times. Check for it here starting Friday.
One of the key players behind the Taylor Bean debacle is its owner and chief, Lee Farkas. He was a big name in Ocala circles but has kept a surprisingly low profile aside from some glowing pieces in local magazines. In one interview this summer with Ocala magazine (see image above), Farkas said he came here "penniless after living in St. Thomas in the Virgin Islands." Now more details are emerging about how he ran Taylor, Bean.
Today's Wall Street Journal takes a closer look at Farkas, described in the story as "a 57-year-old with a bodybuilder's physique and a penchant for sports cars and corporate jets," who "once zipped around Taylor Bean headquarters on a Segway scooter until he crashed it into a cubicle." Here are some highlights we learn about Farkas:
* A college dropout, Farkas turned to mortgage banking after running a maker of storage tanks in New Mexico, working at a liquor store in the Virgin Islands and renovating houses in central Florida. "From that unlikely start," the Journal states, Farkas would build Taylor, Bean & Whitaker Mortgage Corp. into the nation's 12th-largest home-mortgage lender.
* While some employees admired Farkas's charitable giving, they feared his angry outbursts. He once fired his sister, Terri, by email but soon rehired her. Experienced executives who endured public yelling by Farkas say they had been "Farkassed." Farkas told the Journal he was "very passionate."
* During the housing boom, Farkas built what was called Taylor, Bean's global headquarters in an industrial area of Ocala. The building features a stained-glass ceiling with images of a bull and a bear. In the executive dining room, the in-house chef served such dishes as roast ostrich to senior executives.
* Senior executives told computer technicians on occasion to bring down a computer system used in closing loans called TBDocs and then keep it down for hours, the Journal reported. Why? Because Taylor Bean allegedly needed to halt loan closings temporarily but didn't want to admit that it was short of cash. Farkas said he didn't believe the computer crashes were deliberate.
Federal agents finally raided Taylor, Bean headquarters in early August, barred the company from making government-backed mortgages, and forced it to shut its lending business.
What's one of the next big shoes to drop? Bankrupt Taylor, Bean still has an enormous, $78 billion mortgage servicing portfolio which will be coming up for grabs. Look for those receivables to hit the auction market just as soon as the bankruptcy trustee signs off.
-- Robert Trigaux, Times Business Columnist