Taylor Bean & Whitaker is (was) a mortgage company out of Ocala, FL, that dealt primarily in issuing and servicing FHA-backed loans. By some accounts, they were something like the third largest FHA lender in the country. In my mind, this is huge news - news that the mainstream news media has inexplicably decided not to cover.
Last week, the FHA issued what is essentially a cease and desist order that bars TBW, temporarily at least, from issuing any new FHA loans. As a result, any loans in the pipeline that consumers were in the process of closing on have become were null and void. Supposedly, the company was still in the business of servicing existing loans; however, after the FHA order and a raid on their offices by local authorities, the company laid off nearly all of their staff, dealing a major blow to Ocala's economy, and leaving a lot of existing customers hanging, me included.
Many of the company's customers did not find out until late last week that there was any problem at all, when they either noticed that the monthly draft of their mortgage payment had not debited yet, or when they attempted to make their payment online and were unable to do so. Since then, consumers have been locked out of their online accounts, news has been trickling out very slowly from the FHA's website indicating that Bank of America would be taking over servicing of all existing FHA loans, and that customers should either mail their payments, or wait until they receive a letter from BoA providing details of the transfer.
This has been particularly disconcerting to me, and many other TBW customers, I'm sure. I'm not at all happy that Bank of America has been awarded the honor of servicing these loans. Given their own allegations of fraud, questionable use of TARP money, and shaky standing, I'm wondering why they're involved at all, and again, why this hasn't been bigger news among mainstream media. I can only imagine that, with the shaky economic recovery currently in effect, that the administration doesn't want to rock the boat and has somehow influenced the media to put a lid on it. Though I'm a fan of the Obama administration, I'm not thrilled with the lack of progress on oversight of the banking industry and the SEC and the business-as-usual goings on, and I wonder if Obama is capable of effecting real change within our financial system.
I'm also unhappy with the scant and incomplete information being provided to the mortgage holders. Are all of TBW's loans going to BoA? Or just the FHA loans? The BoA representative I spoke with yesterday seemed to think it was all of the loans, but the FHA site specifies just the FHA loans. I don't even know if my loan was an FHA loan - I'll have to check my documents.
What about those of us who were set up for auto draft and whose payments never came out of our bank, despite TBW's records showing that the payments had posted? Do we just wait? Will we be penalized?
What about our escrow accounts? No word from anywhere whether those funds are safe and with property tax deadlines looming in municipalities around the country, what are our assurances that our taxes will be paid, when TBW has cut nearly all of its staff and its bank accounts seem clearly frozen?
In regard to TBW, it seems the FHA ceased doing business with them due to TBW's failure to file a key report, and some reports of irregularities in lending documents. Apparently TBW's default rate was excessively high, an indicator that points the finger at some widespread fraud going on. This is outrageous, given that we are nearly a year into the whole bailout mess to begin with. It seems that there are many, many small mortgage firms taking advantage of FHA's no doc lending requirements, many of them fraudulently, and that the FHA does not have systems in place to monitor them.
It seems, sadly, business as usual. Unfortunately for the multitude of borrowers who were ready to close on a home, the sellers who were depending on finalizing the sale of those same homes, and the existing customers - well - we're all left hanging. I'd really like to know where the real reform efforts are, and at what point this or any future administration is going to be able to change the dynamic in this country so that the rights of the average American citizen, rather than big business, is being protected.
Wednesday, August 12, 2009
Thursday, August 6, 2009
Bank of America - American Criminals!
This is a copy of an email just sent to the White House ... what banks are getting away with these days is outrageous.
"I would like to know how it is that banks like Bank of America, who have received taxpayer bailout money, are continuing to operate as per the status quo.
I walked into a local Bank of America branch today to cash a paycheck from my employer that was written off a Bank of America account. I was told there would be a $6 fee to do so! I asked why, and was told it was because I don't bank with them - if I did, it would be free. (Well I would HOPE so!!)
I told them to forget it - the fee is outrageous and represents exactly why I don't typically do business with traditional banks (I use a credit union). The check was for $256. This represents a fee of about 2.5% for the privilege of cashing a check in their institution. I could understand a minor fee if there was some risk to them, but this was a check written off one of their accounts! There was no risk, no cost of doing business to cover. It is simply a bogus, predatory, and opportunistic means to bring in more to their bottom line.
I have a MAJOR problem with the fact that this bank is receiving part of MY taxpayer money to fix problems THEY had a hand in creating in the first place, and that they see fit to tack on outrageous fees like this to the average middle class American consumer. Banking should not be a privilege for the wealthy few.
With all due respect, the banking system in this country needs to be fixed immediately. You aren't doing enough, quickly enough, to overhaul it. Ken Lewis and other like-minded CEO's have had their hands slapped and that's it. It's unacceptable."
"I would like to know how it is that banks like Bank of America, who have received taxpayer bailout money, are continuing to operate as per the status quo.
I walked into a local Bank of America branch today to cash a paycheck from my employer that was written off a Bank of America account. I was told there would be a $6 fee to do so! I asked why, and was told it was because I don't bank with them - if I did, it would be free. (Well I would HOPE so!!)
I told them to forget it - the fee is outrageous and represents exactly why I don't typically do business with traditional banks (I use a credit union). The check was for $256. This represents a fee of about 2.5% for the privilege of cashing a check in their institution. I could understand a minor fee if there was some risk to them, but this was a check written off one of their accounts! There was no risk, no cost of doing business to cover. It is simply a bogus, predatory, and opportunistic means to bring in more to their bottom line.
I have a MAJOR problem with the fact that this bank is receiving part of MY taxpayer money to fix problems THEY had a hand in creating in the first place, and that they see fit to tack on outrageous fees like this to the average middle class American consumer. Banking should not be a privilege for the wealthy few.
With all due respect, the banking system in this country needs to be fixed immediately. You aren't doing enough, quickly enough, to overhaul it. Ken Lewis and other like-minded CEO's have had their hands slapped and that's it. It's unacceptable."
Sunday, August 2, 2009
Reg D Charges
I was browsing the web today and came across some articles about bank service charges being the new aggravation among people in the current economy.
I then decided to check my bank accounts online and realized that I'd been hit with two $13 charges in my savings account due to excessive Regulation D transfers. How ironic! On top of that, the bank also mistakenly debited my checking account twice for a monthly loan payment.
Regulation D stems from the 1933 Securities Act, and basically puts a limitation on the number of transfers that the owner of an interest-bearing account can make electronically to a non-interest bearing account over the course of a month. It has something to do with how much money a bank must keep in reserve to satisfy the Fed.
The point is, my meager savings account had a total of $74 and change in it the other day, a result of my continuing, futile attempt to put some money away. I decided to temporarily transfer all but $25 of that balance back to checking to ensure upcoming debits would be covered like, oh, my mortgage payment. Unfortunately, the bank had thoughtfully moved some money from the account earlier in the month to cover a shortage, and I had done the same, and boom, though I'd not exceeded the six-transfers-per-month limitation, I had exceeded the bank's self-imposed two free transfers limit. So, two $13 fees later, and my account now has a balance of negative $1.
My husband and I are desperately trying to stay on budget, cover our bills faithfully, and maybe save a little money. I am incredibly diligent about our accounts - I'm not an irresponsible person. We don't have much in the way of debts - mainly a few closed-ended collateral-based loans. We've made our mistakes in the past, like everyone else, and we are simply trying to keep our heads above water. The problem lies in the fact that we, like many people out there today, live paycheck to paycheck. There's never a lot left over to provide a cushion and no matter how hard we try, something usually comes up that depletes anything we've been able to save. In other words, we never seem to get ahead.
That's why these constant little dings niggle me so much. I try like hell to squirrel away $75, and I end up losing $25 of it because of a nuisance rule like this!
Never mind that the bank isn't required to charge a fee after two transfers. Never mind that the bank could, instead of nickel and diming us all to death, just deny any transfers after the monthly limit of six is reached. Never mind that it's my own money and shouldn't I be able to do with it as I damn well please? With rules like these, where is the incentive to even put money in a savings account?
Did I mention this Reg D rule doesn't apply to account holders with substantial balances in their accounts? How nice for those people fortunate enough to have an extra million or so in the bank.
So what to do? The same thing as always - I fight back. I immediately fired off an email to the bank outlining my expectation that they should credit the $26 in charges back to my account since I wasn't aware of their policy, and asking them to immediately credit the checking account for the extra loan payment.
Since I have no cushion, I'll need them to do it asap, before my mortgage payment comes out on Wednesday. Good thing I even had the mortgage money set aside in the account to begin with. Had it been another time of the month, the bank's mistake would have put me $214 in the hole over a weekend, a big problem if I'd needed to rely on cash in my account for an emergency or even basic living expenses like groceries.
Most aggravating for me, though, is the time and energy wasted on all of it - trying to resolve a problem over such a minor amount of money, that unfortunately, can cause such a great hassle to me. This when I try so hard to be careful and do the right thing. Life is too short to worry about it, but the consequences for a regular Joe like me, are to great to ignore.
I then decided to check my bank accounts online and realized that I'd been hit with two $13 charges in my savings account due to excessive Regulation D transfers. How ironic! On top of that, the bank also mistakenly debited my checking account twice for a monthly loan payment.
Regulation D stems from the 1933 Securities Act, and basically puts a limitation on the number of transfers that the owner of an interest-bearing account can make electronically to a non-interest bearing account over the course of a month. It has something to do with how much money a bank must keep in reserve to satisfy the Fed.
The point is, my meager savings account had a total of $74 and change in it the other day, a result of my continuing, futile attempt to put some money away. I decided to temporarily transfer all but $25 of that balance back to checking to ensure upcoming debits would be covered like, oh, my mortgage payment. Unfortunately, the bank had thoughtfully moved some money from the account earlier in the month to cover a shortage, and I had done the same, and boom, though I'd not exceeded the six-transfers-per-month limitation, I had exceeded the bank's self-imposed two free transfers limit. So, two $13 fees later, and my account now has a balance of negative $1.
My husband and I are desperately trying to stay on budget, cover our bills faithfully, and maybe save a little money. I am incredibly diligent about our accounts - I'm not an irresponsible person. We don't have much in the way of debts - mainly a few closed-ended collateral-based loans. We've made our mistakes in the past, like everyone else, and we are simply trying to keep our heads above water. The problem lies in the fact that we, like many people out there today, live paycheck to paycheck. There's never a lot left over to provide a cushion and no matter how hard we try, something usually comes up that depletes anything we've been able to save. In other words, we never seem to get ahead.
That's why these constant little dings niggle me so much. I try like hell to squirrel away $75, and I end up losing $25 of it because of a nuisance rule like this!
Never mind that the bank isn't required to charge a fee after two transfers. Never mind that the bank could, instead of nickel and diming us all to death, just deny any transfers after the monthly limit of six is reached. Never mind that it's my own money and shouldn't I be able to do with it as I damn well please? With rules like these, where is the incentive to even put money in a savings account?
Did I mention this Reg D rule doesn't apply to account holders with substantial balances in their accounts? How nice for those people fortunate enough to have an extra million or so in the bank.
So what to do? The same thing as always - I fight back. I immediately fired off an email to the bank outlining my expectation that they should credit the $26 in charges back to my account since I wasn't aware of their policy, and asking them to immediately credit the checking account for the extra loan payment.
Since I have no cushion, I'll need them to do it asap, before my mortgage payment comes out on Wednesday. Good thing I even had the mortgage money set aside in the account to begin with. Had it been another time of the month, the bank's mistake would have put me $214 in the hole over a weekend, a big problem if I'd needed to rely on cash in my account for an emergency or even basic living expenses like groceries.
Most aggravating for me, though, is the time and energy wasted on all of it - trying to resolve a problem over such a minor amount of money, that unfortunately, can cause such a great hassle to me. This when I try so hard to be careful and do the right thing. Life is too short to worry about it, but the consequences for a regular Joe like me, are to great to ignore.
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