BoA Boards 180,000 GNMA Mortgages Smoothly
Ocala, FL-It took a little more than three weeks for Bank of America to board the 180,000 Ginnie Mae loans being serviced by Taylor, Bean & Whitaker here, a process that went rather smoothly given the reasons behind the transfer.
Most servicing transfers have ample preparation periods for all involved, but in this case, Ginnie Mae's suspension of TBW as a seller/servicer came out of the blue in early August as that lender's troubles began to snowball rapidly.
BAC Home Loans Servicing is Ginnie Mae's master subservicer and the agency moved the TBW portfolio to it on that day. For those with Ginnie Mae loans who were negotiating a loan modification, workout or repayment plan with TBW or Sparta Special Servicing, BAC has received the information and a loan specialist from the company will call the consumer to resume those discussions.
Under federal law, servicing transfer notices are required to be sent by both the old and new servicer.
BAC has just started sending those out but it's unclear if TBW made any notifications to its former clients, other than a notice posted on its website.
Besides Ginnie Mae pulling its servicing rights from TBW, Freddie Mac - a major buyer of TBW's conventional production - quickly put in the call to transfer its servicing to Cenlar, the New Jersey-based subservicing specialist.
Servicing for TBW's nonperforming loans went to either Saxon Mortgage Services (a division of Morgan Stanley) or Ocwen Financial Corp.
TBW had retained some private-label servicing, and prior to its filing for Chapter 11 said it planned to remain in the servicing business.
Calls to Cenlar and a representative of TBW were not returned at press time.
However, a statement issued after the filing said TBW will operate on a scaled-down basis, and it could possibly liquidate its assets.
Among the issues consumers had to deal with is a misplaced payment for the month of August, or possibly no payment at all. TBW stopped making automated debits for mortgage payments around Aug. 4.
A Bank of America spokesman said those consumers who sent their payments directly to TBW would not get a late fee, nor would derogatory information be sent to the respective credit repositories.
This protection will remain in place until October.
The spokesman added the bank is making plans to manually process payments from those TBW customers who pay automatically.
Those customers who made automated payments to Taylor Bean will be receiving notification from BAC about further participation.
Former Taylor Bean customers will also get access to other electronic payment methods, including pay-by-phone and online payment.
The smooth sailing on the servicing side of the TBW mess is in stark contrast to the originations side.
TBW stopped originating mortgages abruptly when Freddie Mac and Ginnie Mae suspended them.
In addition, warehouse lender Colonial BancGroup, hoping to recapitalize on the strength of a TBW-led consortium, failed and was closed by the government, creating chaos in the warehouse lending market.
Questions about possible fraud were added to the mix when the federal government raided both TBW and Colonial.
TBW was the 13th largest servicer in the country in the most recent MSN rankings, and it was a top 20 wholesale lender as well.