Taylor, Bean & Whitaker Mortgage Corp. filed for relief and protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code in a Jacksonville court on Monday.

According to the bankruptcy petition, Taylor Bean has between 1,000 and 5,000 creditors, and more than $1 billion in assets and liabilities. The distressed company said it plans to operate on a scaled-down basis and begin the work of recovering, restructuring, and possibly liquidating its assets.

HUD Secretary Shaun Donovan said the suspension of Taylor, Bean & Whitaker’s origination of government-insured mortgages sends a clear message to the lending world that FHA will not do business with companies that don’t follow the rules.

That suspension triggered a three-week spiral — an order from Florida’s banking regulator to cease and desist mortgage lending a federal raid of Taylor Bean’s Ocala offices; an essential black-listing by mortgage securities

issuers; the revocation of its surety bond; a mandate to stop pursuing foreclosures a petition to bar the company’s top executives from government-related transactions; and now the company’s bankruptcy.

Taylor Bean, one of the nation’s largest independent mortgage lenders, said in a public statement that the series of events in recent weeks “crippled the company’s business operation.”

Neil Luria of Navigant Capital Advisors has been named chief restructuring officer by Taylor Bean’s board to help unravel the mortgage company and its assets.

Luria said in a corporate statement, “This is a very complicated business, and the speed of its collapse has been stunning,” adding that Taylor Bean’s management and employees have “worked tirelessly under very stressful circumstances.”

Taylor Bean argues that its struggles stem from investigations surrounding the failure of Colonial Bank earlier this month, which for years was Taylor Bean’s primary bank.

When Colonial went under, the company says approximately 100 of its bank accounts were frozen, which created a myriad of problems processing borrower payments and making payments on their behalf, including homeowner’s insurance premiums and real estate taxes.

The 27-year old Taylor Bean says it plans to appeal the decisions by HUD and securities issuers Freddie Mac and Ginnie Mae to terminate Taylor Bean’s services, “but has no way to continue normal business operations in the interim.”