mortgage

Some Taylor, Bean answers

Sept. 4, 2009
Written 10 a.m. EDT

OUCH: The unemployment rate rose to 9.7 percent in August, and the number of jobs fell by a net 216,000, according to the Labor Department. This is the highest unemployment rate since the depths of the 1982-83 recession, which until recently had been the worst recession since the Great Depression.

In July, the unemployment rate was 9.4 percent, and it was a jump to 9.7 percent in one month. The decline in nonfarm payrolls was smaller than most economists had expected. Normally I say it's sorta-kinda not-so-bad news when job losses aren't as bad as forecast, but the unemployment rate rises higher than expected, because that's an indication that the long-term unemployed have regained hope -- that they've gotten off their couches and started looking for jobs again because they believe they might succeed this time.

Not in this case. No matter how you look at it, a 9.7 unemployment rate is absolutely awful. Bad economic news is often good news for mortgage rates, but not this time. Higher unemployment means greater risk for mortgage lenders, because job loss triggers lots of mortgage delinquencies and foreclosures. As risk rises for lenders, they will be reluctant to cut rates and quicker to raise rates.

Whenever you're puzzled by the behavior of lenders, just put yourself in their shoes. If you were lending money to people so they could buy houses, would you become more cautious in today's economic environment, when hundreds of thousands of jobs are disappearing every month? Would you demand to see fresh pay stubs every month while the loan is in the application and underwriting process? I would, and so would you, and that's why banks seem so skittish and why they pester you for updated paperwork.

TAYLOR, BEAN UPDATE: Taylor, Bean & Whitaker has transferred the hundreds of thousands of mortgages that it had been servicing before it shut down and declared bankruptcy last month.

As TBW explains on this page, all Ginnie Mae-backed loans were transferred to Bank of America for servicing. (I'll get to the non-Ginnie loans five paragraphs down.) Translated, this means that if you had a Federal Housing Administration, Veterans Administration or Rural Housing Service loan serviced by TBW, your new servicer is Bank of America and that's where you should send your payments.

TBW says you can reach BofA's servicing department at (800) 669-6607.

A BofA spokesman says the lender mailed "welcome" letters to its former TBW customers last week, and everyone should receive their letters by today, at the latest.

Now, if you've been reading my blog posts lately, you know that there have been problems with TBW's escrow account practices. A Bank of America spokesman tells me that if your mortgage was transferred from TBW to BofA, then BofA will make sure that your insurance and taxes are paid. If, for some reason, they aren't paid on time, then you won't be on the hook for late fees and penalties.

BofA's position is that, if TBW didn't transfer your escrow funds, that's something for BofA and TBW to work out. They're not going to put you in the middle of it. Let's hope.

TBW says that if your loan was backed by Freddie Mac, and if you were current on your payments as of your August payment, your loan will be serviced by Cenlar. Cenlar can be reached at (877) 680-5583. Here's Cenlar's welcome page for former TBW customers. It has answers to frequently asked questions.

Here's Freddie Mac's self-service lookup where you can find out if you have a Freddie loan.

If you were delinquent on your mortgage as of August, then your loan has been transferred either to Saxon or Ocwen. I don't know much about Saxon, but if your delinquent loan is with Ocwen, you're in good hands. They're willing to work something out with you. Saxon's number is (888) 422-6451 and here is the welcome page for former TBW customers. Ocwen's number is (800) 746-2936.

Some readers tell me they have received "welcome" letters from more than one servicer. My recommendation is that you call the servicers to try to straighten things out. If matters are still confused, then mail your monthly payment by Sept. 15 to the servicer that you got the last welcome letter from. If you make the payment by Sept. 15, your payment won't be reported as late, and if you mail it to the wrong servicer, it's up to them to sort it out. Federal regulations protect you and your credit history in situations like this.

TBW provides this advice: "It is important for all consumers that your loan number is written on your check and that you include any special payment instructions such as additional payments to principal or escrow. Use your TBW loan number until you receive a new loan number from your new servicer."

Let me repeat something: It's up to the loan servicers to clear up any SNAFUs. To be on the safe side, photocopy your September payment check before you send it (if you haven't mailed it already), and write down the address you sent the check to, in case someone asks.

What if you were making payments via automatic draft from a checking account? Here's what Cenlar has to say on its FAQ page; I don't know if the other servicers have a similar policy, but I assume they do.

Cenlar says: "If your loan payment drafted in the past this service will continue. There is nothing that you are required to do at this time. September and subsequent payments will be drafted no later than the next scheduled draft date. If your payment did not draft in the month of August it will be drafted at a later date once the servicing transfer is complete. We will notify you accordingly. Please be assured that there will be no adverse credit reporting or action taken as a result of delays. Your patience is appreciated."

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