Regulators Reach Agreement With Taylor, Bean & Whitaker Over Exotic Loans

ssachusetts Division of Banks and Taylor, Bean & Whitaker Mortgage Corp. (TBW) have reached an agreement regarding TBW's mortgage lending practices for exotic loans made in 2006. The agreement will result in a detailed review of TBW's nontraditional loan exceptions, the adoption of the federal loan modification program to assist struggling homeowners and the payment of $9 million to assist 14 states in their oversight of mortgage origination practices. A coordinated multi-state examination alleged exceptions relating to TBW's underwriting standards, compliance and risk management practices, and internal control procedures with regard to the nontraditional loan products. Alleged practices included the multiple submissions of loan applications by third-party originators through automated underwriting programs. The major provisions of the agreement between TBW and the 14 state mortgage regulators include the following: [list]The implementation of a loan modification program for loans held in TBW's investment portfolio that will conform with the Treasury's Making Home Affordable program. TBW will also make reasonable efforts to secure any required third-party consents in order to modify mortgage loans currently serviced. *The hiring of an independent firm, to be approved by the state mortgage regulators, to review TBW's nontraditional mortgage loans originated from 2006 to 2007 to determine whether additional reimbursement to consumers is warranted. *The implementation of a comprehensive compliance program, to be reviewed and approved by the state mortgage regulators, to ensure compliance with applicable laws, regulations, and rules governing the conduct and operation of its mortgage business in each of the states. *The payment of $9 million by TBW to assist the states in their oversight of mortgage origination practices. Half of the payment will be apportioned equally to the 14 jurisdictions that completed the multi-state examination. The remaining monies will be dedicated to the ongoing development and maintenance costs of the Nationwide Mortgage Licensing System, which was developed by state banking and mortgage regulators starting in 2003 to create an online, centralized database of mortgage companies and originators.[/list] As part of the agreement, TBW will reach out to impacted consumers who qualify for the Making Home Affordable program. The 14 State mortgage regulators included in this settlement are the Arizona Department of Financial Institutions; the District of Columbia Department of Insurance, Securities and Banking; the Florida Office of Financial Regulation; the Georgia Department of Banking and Finance; the Idaho Department of Finance; the Illinois Department of Financial Professional Regulation-Division of Banking; the Louisiana Office of Financial Institutions; the Maryland Office of Financial Regulation; the Massachusetts Division of Banks; the Mississippi Department of Banking and Consumer Finance; the New Jersey Department of Banking and Insurance; the North Carolina Office of the Commissioner of Banks; the Pennsylvania Department of Banking; and the Vermont Department of Banking, Insurance, Securities and Health Care Administration. SOURCE: Massachusetts Division o


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