Chapter 11 Bankruptcy

According to an article at CNN, Taylor, Bean & Whitaker Mortgage Corp. has filed for Chapter 11 bankruptcy protection, after suffering from crippling events that have prevented it from continuing business.

The article said:

“The death spiral began after the Federal Housing Administration suspended Taylor Bean’s authority to issue FHA-insured loans. That was immediately followed by notices from Ginnie Mae and Freddie Mac (FRE) suspending Taylor Bean as an issuer of mortgage-backed securities and a mortgage servicer.”

Before completely shutting down its operations last week and filing bankruptcy, Taylor Bean was the largest independent home loan provider in the country.  The company’s bankruptcy and closure has forced over 2,000 workers into unemployment and created chaos in many customers’ accounts.

The article continued:

“Taylor Bean put the blame for the events on the investigations surrounding the failure of Colonial Bank, which for years was Taylor Bean’s primary bank. But it froze nearly 100 Taylor Bean bank accounts in the days after the federal suspensions on Taylor Bean. “This action created myriad problems in processing borrower payments and making payments on their behalf – such as homeowner’s insurance premiums and real estate taxes,” the company said Monday.”

Taylor Bean’s Chapter 11 bankruptcy may very well end up in liquidation; but the company hopes that filing Chapter 11 bankruptcy will give it time to appeal to the FHA, Ginnie Mae and Freddie Mac and recover, restructure and possibly emerge from bankruptcy.

Source: CNN Money