As a result of the FHA action, Taylor Bean issued a statement Wednesday saying it is shutting down: "TBW is cooperating with each of the agencies with respect to its servicing operations and expects to continue to service mortgage loans as it restructures its business in the wake of these events."
The Department of Housing and Urban Development, which oversees the FHA, said it took action against Taylor Bean because the company failed to submit a required annual financial report and to disclose "certain irregular transactions that raised concerns of fraud." Officials declined to provide details about the possible fraud.
Privately held Taylor Bean is ranked as the 12th-largest mortgage lender in the US. Click here to read more from the Wall Street Journal.
This past spring, Taylor Bean offered to put $300 million into Colonial to boost the bank's liquidity and value. The investment was contingent on Colonial receiving funds from the US Treasury Department's Troubled Asset Relief Program (TARP), but Colonial said the deal fell through last week.
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