In a confidence inspiring housing green shoots story, the third largest issuer of FHA loans last month, Taylor, Bean & Whitaker Mortgage Corp, was suspended from making additional loans insured by the agency. In the Ponzi era actions such as forgetting to file an annual report and not disclosing, "certain irregular transactions that raised concerns of fraud" almost qualify as acceptable business practices. But the head of HUD, which oversees the FHA, is drawing a line in the sand.
"Today, we suspend one company but there is a very clear message that should be heard throughout the FHA lending world: Operate within our standards or we won't do business with you," said HUD Secretary Shaun Donovan
Given that Donovan remarked earlier this year that the FHA may have to go to Congress for a bailout to cover forthcoming losses, the FHA's standards may lead it to not doing business at all.
Taylor Bean Suspended From Making FHA Loans [WSJ]