Taylor Bean and FDIC Battle Over Escrow Funds Held in Colonial Accounts
Homeowners’ held hostage as fight over funds delays payment of property taxes and insurance premiums.
Palm Coast, FL – September 3, 2009 – The collapses of Taylor Bean & Whitaker Mortgage Corp. and Colonial BancGroup continue to have repercussions on homeowners holding mortgages originated by bankrupt Taylor Bean and funded by Colonial. The FDIC is fighting with Taylor Bean for control of $1.9 billion held in more than 100 Colonial accounts. The money was paid by homeowners and placed in escrow to cover real estate taxes and property insurance premiums.
“Simply put, (Taylor Bean) is holding hostage hundreds of thousands of homeowners and each day of delay is causing mounting and growing harm to individual homeowners as a result of (Taylor Bean’s) refusal to respect the termination (of Colonial Bank’s business relationship with Taylor Bean),” FDIC lawyers said in their motion.
The FDIC is acting in the capacity of receiver of recently closed Colonial. They charge that Taylor Bean refuses to turn over customer data required to properly distribute homeowners’ escrow funds. Real estate taxes and insurance premiums are not being paid. Some homeowners have already received cancelation notices from their insurance companies.
The FDIC says as many as a half a million policies could lapse during hurricane season and is concerned the agency might be on the hook for homeowners’ losses.
The bankruptcy court will hear the case September 11 in Jacksonville.
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