A Sacramento mortgage lender's vision

OK- a little lagged here, but for those that don't know, Taylor Bean Whitaker closed it's doors last week. More correctly, (and not wholely unexpectedly) the Fed closed the doors for them. TBW, 12 largest consumer mortgage lender in the US (and 5th largest FHA/VA lender) was accused of, among other things, concealing an investigation by the Commonwealth of Kentucky to HUD. HUD took swift action as you can see in their press release on Tuesday, August 4th. All too telling is the press release TBW sent out the next day to those wholesale brokers. TBW Press Release 08052009.pdf .

I personally was fortunate enough to close the last loan in my pipeline at TBW in July. Other loan officers and brokers have been much less lucky and are having to deal with switching live files. Further complicating the situation is the fact that TBW had some quirky guidelines (niches) that is making it hard to find new homes for these loans. Some wholesalers have stepped up to the plate to aid the transition. The full story is available @ ML Implode- It's a fascinating read as TBW has been spiraling around the toilet for months.

Ironically, TBW's demise might help ease rates. After all, the collapse will [temporarily] lower supply of mortgages, and demand should rebound after the initial panic leading to a lower equilibrium Fannie Mae coupon price and lower rates. But that is very simplistic economics- the market remains very volatile.

Interestingly enough, as of 2009-07-31 Wells Fargo shut down all mortgage lending operations in Canada.