According to the Wall Street Journal, The FHA suspended Taylor, Bean & Whitaker Mortgage Corp. from making FHA loans, and “raised questions about the company’s business practices and financial disclosures.”

WSJ continues that TBW didn’t submit a required financial report AND failed to disclose “certain irregular transactions that raised concerns of fraud.”

Officials demurred from detailing the fraud, however reports:

The FHA said in a written statement Tuesday that Taylor Bean failed to submit its required annual financial report and failed to inform the FHA that TBW’s independent auditors ended their examination of the company when they found “certain irregular transactions that raised concerns of fraud.”

In addition to the loan suspension, the FHA is also recommending that two top company officials be temporarily banned from doing mortgage business with the federal government.

The FHA alleges that TBW President Ray Bowman and TBW Chief Executive Officer Paul Allen submitted false or misleading documents to the U.S. Department of Housing and Urban Development.

From the WSJ:

It seems Mr. Allen “submitted false or misleading information to Ginnie Mae concerning a delay in submitting financial reports. It said Mr. Bowman submitted two false certifications regarding information lenders are required to verify each year. Neither Mr. Allen nor Mr. Bowman could be reached for comment.”

TBW bought almost $30 billion in mortgages last year and that makes it the largest lender ever suspended by the  FHA. It is a private company but Inside Mortgage Finance lists it as the 12-largest lender in the US this year.

HUD Secretary Shaun Donovan announced: “Today, we suspend one company but there is a very clear message that should be heard throughout the FHA lending world: Operate within our standards or we won’t do business with you.”

An email sent to employees from Chairman of the Board Lee Farkas around 1:00 pm announced the company was closing, and they were to pack up and leave.  The email included the remark that Farkas had done everything he could to save the company.  Later they issued a news release that all loan origination operations had stopped, but they will continue to service loans.

Evidently TARP, HUD and Ginnie Mae are all looking closely at the activities of TBW, the Wall Street Journal includes a comment that independent auditor, Deloitte LLP, had resigned from that position with Taylor, Bean & Whittaker because of “irregular transactions” that raised concerns about fraud. There was no comment from Deloitte. The full Wall Street Journal article Ocala.Com’s full article