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Bankruptcy seen "imminent" for lender Taylor Bean

NEW YORK, Aug 11 (Reuters) - Lawyers for Taylor, Bean & Whitaker Mortgage Corp, the 12th-largest U.S. mortgage lender, said in court papers last week that a “bankruptcy filing is imminent” for the lender after it was forced to shut down mortgage lending operations.

In court papers filed on Aug. 6, in U.S. District Court for the Northern District of West Virginia, lawyers for Taylor Bean said that due to recent actions taken against the company by the U.S. Department of Housing and Urban Development, and mortgage financiers Freddie Mac FRE.N and the Government National Mortgage Association (Ginnie Mae), the company is expected to file for bankruptcy shortly.

The Federal Housing Administration said last week it had barred the Ocala, Florida-based company from making loans that the agency insures, for having failed to submit a required annual financial report and “misrepresenting” its dealings with an auditor that had discovered “irregular transactions that raised concerns of fraud.” [ID:nN04190527]

The lawyers, from the law firm Steptoe & Johnson, had made the statement in a request to halt a civil litigation proceeding saying that the company’s lawyers had “received word that a bankruptcy filing is imminent.”

Taylor Bean ceased mortgage lending operations on Aug. 5.

Taylor Bean made $17 billion of mortgage loans from January to June for a 1.7 percent share nationwide, according to Inside Mortgage Finance. It is one of the largest U.S. home loan providers not owned by a large bank and thus lacks large amounts of deposits that could help cushion market turmoil.

The Wall Street Journal reported on Tuesday that an internal email at Taylor Bean dated Aug. 10, referred to a new computer folder “to assemble all of our bankruptcy detailed spreadsheets.”

A Taylor Bean executive was not immediately available to comment on Tuesday. The voicemail for a company spokeswoman said she no longer works at the firm. (Editing by Lincoln Feast)

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