Last week was a mild one for mortgage-related firms that failed; just three financial institutions succumbed to the epidemic that has already afflicted over a hundred other institutions this year. More than 600 mortgage-related operations have failed or been closed since the subprime crisis began.
On Friday, the Illinois Department of Financial and Professional Regulation – Division of Banking seized Ravenswood Bank. The Federal Deposit Insurance Corp. was appointed receiver.
Ravenswood was established in August 1996, according to FDIC data. It employed 40 people as of March 31.
The failed firm faced a final order on May 6 from the FDIC, which in July 2009 issued a cease-and-desist order against Ravenswood.
All of the Chicago bank’s $270 million in deposits were assumed by Northbrook Bank and Trust Co. at an 0.9 percent premium. Northbrook additionally acquired all of Ravenswood’s $265 million in assets including $47 million in residential home loans, $104 million in commercial mortgages and $50 million in construction-and-land-development loans. The FDIC agreed to share some of the losses on $161 million of the assets.
The failure of Ravenswood, the 109th federally insured bank to fail this year, is expected to deplete the Deposit Insurance Fund by $68 million.
Also last week, two credit union failures were reported by the National Credit Union Administration.
One, Kappa Alpha Psi Federal Credit Union, was liquidated. The Addison, Texas-based institution had less than $1 million in assets and just 1,341 members.
“The credit union is minimally capitalized and there are no reasonable prospects for the credit union to achieve adequate capitalization,” the NCUA said.
A day earlier, Certified Federal Credit Union was closed by the NCUA, which cited a “declining financial condition.” Vons Employees Federal Credit Union took over the Commerce, Calif., credit union’s $38 million in asset and 8,580 members.
From Jan. 1 through Friday, 134 mortgage-related companies or operations have failed or been closed, based on events tracked by Mortgage Daily.
Since the start of the subprime mortgage crisis in 2006 — which kicked into high-gear with the November 2006 closing of Meritage Mortgage by NetBank, the December 2006 failure of Ownit Mortgage Solutions and the collapse of Dallas-based Sebring Capital Partners LP one week later — 684 failures and closings have been tracked by Mortgage Daily.
