Taylor, Bean and Whitaker Mortgage Corporation shut down

As most know by now, Taylor, Bean and Whitaker Mortgage Corporation (a massive wholesale lender) was raided on Monday by the FBI as the Troubled Asset Relief Program had two search warrants. When asked, TBW's Chairman Lee Farkas, replied that the warrants were for dealings with Colonial Bank. According to ocala.com: "In April, TBW signed a agreement to put up half of a $300 million equity investment to help infuse the troubled Colonial BancGroup, holding company of Colonial Bank, with headquarters in Montgomery, Ala., and help the bank meet a regulatory deadline. Farkas said that deal ended Friday. At the time of the agreement, Colonial, which has suffered from heavy loan losses, had applied for funding under the U.S. Treasury's TARP. To be eligible for TARP funds, Colonial was required to come up with $300 million in private equity." An independent auditor indicated that there were "irregular transactions that raised the suspicion of fraud"

On Tuesday, the Federal Housing Administration suspended Taylor, Bean and Whitaker Mortgage Corp. from making FHA insured loans. The federal housing administration said this suspension was caused by TBW not filing a mandatory annual report.

There is speculation this could cause interest rates to rise as Taylor, Bean and Whitaker Mortgage Corp. was previously FHA's third largest wholesale lender!