December 14, 2009 05:52 PM UTC

Breaking News - Mortgage Crisis - Loans Sold to more than One Buyer

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• by: Sharon Hanson

According to an article in the NYT which can be found here http://www.nytimes.com/2009/12… transparency in the way the mortgage crisis is playing out is being revealed in a suit brought against Bank of America by BNP and Deutsche Bank investors in Ocala the back office operations of Bank of America.

Apparently the company writing the mortgages funneling through Ocala was Taylor Bean & Whitaker who filed for bankruptcy last August.  “Taylor Bean was shut down by the FHA citing possible mortgage fraud.” And Colonial Bank that was used by Taylor Bean and Whitaker to fund their mortgages was taken over by the Federal Deposit Insurance Corporation.  The article states that the practice was industrywide so no one is safe who obtained a loan during the 2005 – 2008 timeframe from the possibility that your mortgage is owned by two lenders.  So what does this all mean for the borrower or the mortgagee? My guess is that:

If you have a loan you are paying on and you decide to sell your property say due to a job change and you need to move you won’t be able to sell your property because you won’t be able to get a clear title.  

If you have paid off your loan and plan to stay in the property and will it your heirs when you die they won’t be able to get a clear title to your hard earned bought and paid for property.

If you would like to get a loan modification because you either have unforeseen medical expenses or you are now underemployed it won’t happened because no one knows who owns your loan.

If the owner of the note wishes to foreclose on your property because of non-payment due to the mortgagee being unemployed or bankrupted by medical bills by all means insist that they provide you the note as they most likely will not be able to do so.  

Here’s an excerpt from the article. And I think it shows the ominous need of regulating these banks for a couple of reasons – investors are not safe and neither are the homeowners.

But there were a couple of problems with the set-up: the company writing the mortgages funneling through Ocala was Taylor Bean & Whitaker, a lender that filed for bankruptcy last August. And to make its loans, Taylor Bean used money from Colonial Bank, a Montgomery, Ala., institution that also went belly-up. The Federal Deposit Insurance Corporation took over Colonial in August.

Sorting through the wreckage of those related failures has generated more questions than answers so far. Taylor Bean was shut down by the Federal Housing Administration, citing possible mortgage fraud. According to people briefed by those winding down Taylor Bean’s operations, who requested anonymity in order to preserve professional relationships, there are signs that the company sold some of its loans to more than one buyer. Lawyers representing Taylor Bean did not return phone calls seeking comment.