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Both Consumers and Lenders Caught In Taylor Bean Collapse

Florida agency sets up consumer helpline

By Mark Huffman
ConsumerAffairs.com

August 27, 2009

Jason, of Downington, Pa., recently refinanced his mortgage that had been held by Taylor, Bean & Whitaker. As the final order of business, he requested that TB&W send him the money that remained in his escrow balance.

“I recently refinanced away from TB&W,” Jason told ConsumerAffairs.com. “They sent me a check for my escrow balance, over $6,000, and the check was declined!”

Jason is convinced that TB&W was using his money to fund its failing bank portfolio, but there may be another explanation.

The company said in an August 24 statement that “on or about Aug. 6, 2009, approximately 100 Taylor Bean bank accounts were frozen by Colonial Bank. This action created myriad problems in processing borrower payments and making payments on their behalf -- such as home owner’s insurance premiums and real estate taxes.”

That's left consumers like Jason – and Brian, of Scottsdale, Ariz., in the lurch.

“I signed loan documents on Friday and the FBI stopped my wire transfer on Monday after Taylor Bean had received docs and funded. I want my money,” he told ConsumerAffairs.com.

State of confusion

Meanwhile, consumers who have been doing business with Taylor, Bean & Whitaker, are left in a profound state of confusion.

“I have a received letter from RoundPoint Mortgage Servicing Corporation to make payments to them for our TB&W mortgage loan,” Vijay, of San Diego, told ConsumerAffairs.com. “I also received a letter from Colonial Bank that they own our mortgage note. But reading news reports I understand Colonial assets are owned by BB&T and from TB&W website I see BOA will service GINNIE MAE loans, CENLAR will service FREDDIE MAC Loans. If loan is not current servicer will be either SAXON OR OCWEN. Very confusing and I'm afraid to send Sept. 1st payment.”

But consumers are hardly alone in their TB&W woes. As it declared bankruptcy, the company said it owes in excess of $64.9 million to its unsecured creditors, many of whom are its employees who were suddenly terminated earlier this month. Some very large banks are also caught up in the collapse.

Deutsche Bank Securities Inc., a New York unit of Germany's Deutsche Bank AG, has a $42 million unsecured claim against the mortgage lender., according to documents filed in bankruptcy court. Colonial Bank – now owned by BB&T - Henley Holdings LLC, Natixis Real Estate, Plainfield Specialty Holdings, RBC Bank and Sovereign Bank are also listed as large creditors.

What to do?

The banks have teams of lawyers looking out for their interests, but what are consumers to do? Consumers seem to have but a single state agency looking out for them.

Florida's Office of Financial Regulation has ordered TB&W to stop foreclosure proceedings, cease assessing late charges, and quit reporting late payments to any credit bureau.

The agency has also set up a consumer helpline to answer questions from confused and angry consumers. That number is 1-800-848-3792.

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