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Former Taylor Bean customers find mortgage checks not being credited

Rich Jagisch sits at his dining room table with more than 30 letters from Bank of America telling him he is behind on his July and August mortgage, payments he says he made to Taylor Bean, but apparently were not credited to his account.

CHERIE DIEZ | Times

Rich Jagisch sits at his dining room table with more than 30 letters from Bank of America telling him he is behind on his July and August mortgage, payments he says he made to Taylor Bean, but apparently were not credited to his account.

The threatening letters arrive daily, sometimes twice a day.

At last count, St. Petersburg homeowner Rich Jagisch was up to 37 dunning letters from Bank of America threatening late charges or possible foreclosure action against his home if he fails to send in two missing payments in July and August. He was told to pay up by Nov. 18.

The hitch is that he has the paperwork to prove he made those missing payments to Taylor, Bean & Whitaker before the Ocala mortgage lender tumbled into bankruptcy and scandal in August.

Transferring loans to Bank of America and other mortgage companies since then has been a messy process. Regulators had to sort through accusations of stolen funds and unfreeze escrow accounts that were controlled by Colonial Bank, which provided a line of credit to Taylor Bean to make loans. (Colonial was seized by regulators and its assets sold to BB&T after regulators raided Taylor Bean's operation.)

Now Jagisch, like thousands of homeowners across the country, is enduring the next twist in the Taylor Bean nightmare.

An undetermined number of mortgage payments this summer to Taylor Bean were cashed but never credited. But Bank of America, which is handling about 180,000 former Taylor Bean loans, said it has no way of knowing who those customers are since it has not yet reconciled Taylor Bean's books.

"Unless a customer in this situation contacts us, we have no way of identifying whether the delinquency on the account reflects a missed payment, or an uncredited payment, so collection activity continues," Bank of America spokesman Rick Simon said.

Under federal law, mortgage lenders like Bank of America that picked up the servicing of mortgage loans from Taylor Bean could not report missed payments to credit bureaus or take any other action against homeowners during a 60-day transition period.

But those 60 days expired in the beginning of November, leaving worried homeowners wondering if the next victim of the Taylor Bean saga will be their FICO credit rating scores.

"My fear is you muck up a FICO score, and it's worse than a root canal to get that corrected," Jagisch said.

Simon said Jagisch and others like him don't have to worry. Bank of America has decided voluntarily to extend the 60-day window through November — and possibly through December — as it continues sorting through Taylor Bean accounts.

Ginnie Mae, the federal mortgage guarantor that transferred the loans to Bank of America, said it, too, will extend the credit reporting deadline 30 days for about 80,000 former Taylor Bean loans currently considered delinquent. A Ginnie Mae spokeswoman said it's unclear how many of those 80,000 involve cashed checks that were never credited by Taylor Bean and how many are delinquent for other reasons.

Jagisch isn't appeased. He wonders how many others have received the threatening letters and paid up (in essence paying twice) out of fear. He wonders who cashed his checks at Taylor Bean.

And he wonders, regardless of the bank's assurances, whether his credit rating will take a hit. If the bank can't stop a computer program from sending late notices, how well will it police its customers' credit ratings, he said.

Terrie Raley of Irvington, Ky., shares similar concerns. She's received letters and more than 20 calls from Bank of America accusing her of being delinquent on two Taylor Bean payments made in the summer.

Like Jagisch, Raley has talked to customer service multiple times. On three occasions, she said she rattled off check numbers and the dates they were cashed. As in Jagisch's case, the threatening letters kept coming anyway, along with phone calls telling her to pay her debt.

One customer service rep "told me to ignore everything and don't worry about the calls and don't worry about the letters they're sending me threatening foreclosure," Raley said, "but this is pretty heavy stuff to ignore."

On Aug. 5, Taylor Bean abruptly laid off 2,000 employees nationwide, including 1,000 in its Ocala headquarters, after the Federal Housing Administration suspended its authority to issue FHA-insured loans.

The suspension, and subsequent bankruptcy filing of Taylor Bean, both exposed and triggered a flood of problems.

Some homeowners insurance and property tax payments were not paid on time out of escrow. Some customers received checks representing the overage from closed escrow accounts but found those checks bounced. Borrowers could not get through to customer service lines for weeks to talk to Taylor Bean representatives or, in some cases, lenders that had taken over servicing of their mortgage loans.

Exacerbating the situation was confusion over who was in charge. A blend of federal and state regulators, lenders and Taylor Bean representatives were involved in the messy transition, at times giving customers conflicting advice.

The U.S. Department of Housing and Urban Development has steered callers to Ginnie Mae. Advice to Taylor Bean customers on Ginnie Mae's Web site has not been updated since Aug. 31.

Simon, the Bank of America spokesman, said he has no reason to believe the problems involving homeowners like Jagisch and Raley are anything but isolated incidents.

"Loan servicing is a huge operation with thousands of associates working in a high-volume atmosphere on a wide variety of customer circumstances and issues, not just related to the transfer of the TBW loans," he said in an e-mail response.

"We are confident that the vast majority of calls are handled properly, but there are occasional miscues."

Raley acknowledges some pro-active contact recently, though not about the Taylor Bean fiasco. She received a call at home from a Bank of America marketing representative urging her to buy health insurance.

"They're trying to get you to buy insurance, and the whole time they're threatening to foreclose on your house?" she said. "You all are crazy."

Jeff Harrington can be reached at jharrington@sptimes.com or (727) 893-8242. Follow him on Twitter at twitter.com/jeffmharrington.

How to get help

Bank of America has taken over servicing of about 180,000 mortgage loans from the Taylor, Bean & Whitaker portfolio. If a homeowner has received calls or letters from the bank indicating that money is owed for payments that were actually made, the bank said it may be due to one of two scenarios:

• The mortgage payment to Taylor Bean was included in the "lock-box" operations for Taylor Bean held by Colonial Bank. Those accounts were frozen as the FDIC seized Colonial Bank around the same time of the transfer of account to Bank of America. The checks were not cashed nor applied to the mortgage account. The FDIC provided a list of those accounts to Bank of America in October and the bank said it has stopped collection activities on all those accounts.

• An unknown number of customers sent checks to Taylor Bean that were cashed but not credited to their accounts. If the customer notifies the bank's customer service department at 1-800-669-6607, a block should be placed on any collection actions until the situation can be researched. If collection calls continue, the bank urges homeowners to call customer service again. If documentation proves that an earlier check was cashed, Bank of America said it will advance the funds to bring the account current, rather than wait for Taylor Bean's accounting to be reconciled.

If you have a complaint

• The U.S. Department of Housing and Urban Development suggests irate customers consider filing a complaint through the Real Estate Settlement Procedures Act (RESPA). First, customers have to send a formal complaint to Taylor Bean or their new lender and wait 20 days for a response.
For details on the process, go to
www.hud.gov/respa.

• Various lenders have taken over different parts of Taylor Bean's mortgage portfolio. For customer service issues with Bank of America or Saxon, the primary regulator is the Office of the Comptroller of the Currency; the Florida Office of Financial Regulation oversees RoundPoint and Ocwen; and the Office of Thrift Supervision oversees Cenlar.

Former Taylor Bean customers find mortgage checks not being credited 11/07/09 [Last modified: Monday, November 9, 2009 3:44pm]

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