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LOAN MESS' END IN SIGHT

Taylor Bean strikes a deal with the FDIC to free customers' funds.

The FDIC and Taylor Bean & Whitaker are finalizing an accord to quell a mortgage loan crisis that has afflicted thousands of borrowers across the country.

Since the implosion of Ocala-based home lender Taylor Bean in early August, borrowers have complained of a litany of problems: lack of confirmation after payments were made; homeowners insurance and taxes not paid out of escrow on time; and bounced checks from closed Taylor Bean escrow accounts.

Taylor Bean, which is in the midst of transferring much of its loan portfolio to other companies, blamed the problems largely on frozen accounts held by Colonial Bank.

In turn, the Federal Deposit Insurance Corp., as receiver for the recently failed Colonial, accused Taylor Bean of holding hundreds of thousands of homeowners "hostage" by refusing to release their loan information. In a filing in Taylor Bean's bankruptcy case in Jacksonville, the FDIC said that mortgage payments from hundreds of thousands of borrowers have been "sitting in limbo" as a result.

Under a proposed stipulation that could be approved as soon as Monday by Judge Jerry Funk in U.S. Bankruptcy Court in Jacksonville:

-The FDIC would agree to give Taylor Bean all undeposited borrower payment checks and deposited electronic payments in its possession as Colonial's receiver. Upon receiving the checks, Taylor Bean would sort them by investor (i.e., Colonial, Freddie Mac, Ginnie Mae, Bank of America, etc.) and endorse the checks if the mortgage servicing has been transferred. Any remaining checks would be deposited into a Regions Bank clearing account.

-Taylor Bean would transfer servicing of all mortgage loans owned by Colonial Bank to RoundPoint Mortgage Servicing Corp. by Oct. 1. The lender would have until Oct. 30 to reconcile all borrower payments currently held by Colonial and all payments currently under its control.

-When it filed for bankruptcy Aug. 24, Taylor Bean had more than 100 accounts in Colonial holding $1.9 billion, according to the FDIC. The accounts were frozen in early August, shortly before Taylor Bean was forced to stop making Federal Housing Administration loans. Colonial Bank failed and its assets were sold to BB&T about a week later.

Interested parties have until Thursday to comment on the plan. An FDIC spokesman on Tuesday declined to comment on pending legal issues. Attorneys for Taylor Bean & Whitaker could not be reached for comment.

Jeff Harrington can be reached at harrington@sptimes.com or (727) 893-8242.

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