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Taylor, Bean and Whitaker closed its doors today, after a federal summons to cease and desist any new FHA loans originating from the company. Ginnie Mae also terminated its companies ability to issue mortgage backed securities. This comes as a blow since both companies have been providing mortgages through its mortgage broker network for years.

With no FHA or conventional financing to offer, the company had no alternative but to close up shop. The management sent emails to everyone expressing their disappointment that a less drastic option was unavailable. Realize that we’re not talking about a small shop – TBW had over 2,000 employees.

The Federal Government “raided” the company headquarters on August 3, 2009 in Ocala, Florida.

Observe that I put “raided” in quotes? This extends from a media term invoking thoughts of Al Capone being chased by Elliot Ness. But in all actuality, this search was warranted. Taylor, Bean and Whitaker had failed to submit required financial reports which raised the red flag. It was also stated that TBW failed to disclose irregular transactions, further raising the alert of Fraud.

Starting as a small town retail mortgage firm in 1982, Taylor, Bean and Whitaker grew from the grass roots. However in the past 10 years, TBW has grown substantially to be come on of the top mortgage resellers in America.

The outcome of this termination of service is that another pillar is broken in the cornerstone of the mortgage brokerage industry. Now I am not personally saying that I have any direct knowledge of the dealings of the firm and thus not above reproach. From my information, TBW was one of the leading mortgage brokerages and their closure leaves the rest of the industry without another competitor or option. .

What comes to the next evolution of the mortgage industry? Well, pay attention because we’re already pulling back the veil. Mortgage borrowers can choose from a Governmental Lender Service or from the remnants of the once powerful brokerage networks. But Who’s LEFT!? Only a few small Local Lenders that still portfolio their own Loans. I hope you can see that your choices are being eliminated since it becomes harder and harder each day to find a broker. Now you may choose a fixed rate – oh, you can choose 30 or 20 or even 15 years or one of a couple of adjustable programs left – 5, 7 or 10 year fixed rate products that convert to floating rates after the fixed rate portion ends. Is that what you call choice? Well that’s all that’s left! And you call this good for business.

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