The Boss

Taylor Bean Pays $9 Million but Wells Should Pay $100 Million

brad | 27 June, 2009 08:51

Fannie Mae, Freddie Mac, Wells Fargo and Countrywide skate away while a smaller lender with very little government influence is severly penalized.

Taylor, Bean and Whitaker a large national lender has settled with mortgage regulators in Arizona, Washington DC, Florida, Georgia, Idaho, Illinois, Louisiana, Maryland, Massachusetts, Mississippi, New Jersey, North Carolina, Pennsylvania, and Vermont. over lending practices tied to non-conformation loans originated several years ago.

Taylor, Bean & Whitaker Mortgage Corporation will pay $9 million to help the below states oversee mortgage origination practices in part by helping to fund the National Mortgage Licensing System. Exotic loans were the cause of this penalty / TAX. The loan programs in question were interest only loans, option arms and stated income loans.

Allegedly the company allowed borrowers and loan originators to make second or third applications for borrowers that had been declined through the conforming loan channels. When borrowers couldn't get approved using traditional programs, the borrowers information was then reworked and they were able pass through the system under non-traditional or low documentation loans.

It saddens me that the States and Federal government don't have enough courage to take on the biggest culrprits of this cancer. One of which is Wells Fargo. Wells Fargo had falsified 100's of 1000's of re-apps for years. See our story on greenlining mortgages.

Company's such as Wells Fargo and Countrywide to name the largest and worst abusers, RE-originated mega-tons of non-traditional mortgages only after the loan application was declined for tradtional underwriting. Sadly, Wells Fargo won't be accused because of their connection to Warren Buffett as a large shareholder and Obama advisor.

Let's look at Wells Fargo for instance. In the greenlining example above, Wells Fargo created 1000's of joint ventures accross the country in every state under many ficticious business names. Wells, prior to 2008, would 'originate' a traditional loan in their computer system often through their DBA channel which were usually joint ventures with real estate brokerage firms. These 'A' paper loans were primarily Freddie Mac loans, submitted to Freddie Mac electronically through their software. If the loan was declined, loan officers in the Wells Fargo channel were requested and allowed to rework the loan application and broker it out to other entities that were toxic enough to swallow the poison: New Century, First Franklin, Equifirst, Countrywide, Etc.. all out of business now.

Large companies like Wells Fargo knew exactly what was happening and fostered it.

It would not be hard at all for a common regulator to prove this fact because all of the origination information is in their point of origination software and was uploaded to Freddie Mac (which also knew what was going on).

Fannie Mae was Countrywides partner in crime.

The proof is there, the honesty and courage of the regulators isn't