TBW May File for Bankruptcy Protection

Taylor, Bean & Whitaker, the nation's 13th largest residential lender, is expected to file for bankruptcy protection as soon as this week, according to industry sources and published reports. At press time company CEO and part owner Lee Farkas could not be reached for comment. Investment banking sources told National Mortgage News that the Ocala, Fla.-based TBW, a non-bank, had borrowed heavily against its $78 billion residential servicing portfolio. It's unclear how much the non-bank borrowed but the money was part of a $300 million investment that TBW put together to invest in Colonial Bancshares of Alabama, its largest warehouse lender. The money-losing Colonial — also the nation's largest warehouse provider — is expected to eventually be taken over by the Federal Deposit Insurance Corp. TBW shut down its lending operation last week after the Federal Housing Administration suspended it as a lender and seized its Government National Mortgage Association servicing rights. Dow Jones reported that a bankruptcy filing is "imminent" for the lender, saying that an internal e-mail at TBW, dated Aug. 10, referred to a new computer folder "to assemble all of our bankruptcy detailed spreadsheets and support."