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The Mortgage Graveyard
Failed, closed and a c q u i r e d mortgage-related entities.

Lender Exits Wholesale, Expands Branches

Recent mortgage-related closings

Nov. 6, 2010

By staff

In addition to a credit union that was liquidated and four banks that failed, a lender based in North Carolina is shutting down its wholesale lending channel -- though the company is recruiting new retail branches.

At 6:30 p.m. EST Friday, federal and state agents swarmed K Bank and seized control. The Maryland Commissioner of Financial Regulation handed possession of the Randallstown, Md.-based institution to the Federal Deposit Insurance Corp. -- as is done with all federally insured bank failures.

Bad acquisition, construction and development loans contributed to the failure of K Bank, which was hit with an FDIC cease-and-desist order on April 1, 2009.

After that, the California Department of Financial Institutions closed down Western Commercial Bank and First Vietnamese American Bank. "Inadequate capital and weakened financial condition" was cited in the case of Western, and "inadequate capital and lack of earnings" was blamed for demise of First Vietnamese.

Western faced a cease-and-desist order on Aug. 20, while First Vietnamese faced a Sept. 28 FDIC prompt corrective action, a May 25 FDIC cease-and-desist order and a January 2009 FDIC cease-and-desist order.

Including Friday's failure of Pierce Commercial Bank -- which was hit with a Federal Reserve Prompt Corrective Action in June and a cease-and-desist order in December 2009 by the Fed and the Washington State Department of Financial Institutions -- 143 FDIC-insured banks have failed during 2010.

On Oct. 29, the Washington Department of Financial Institutions closed down The Union Credit Union and appointed the National Credit Union Administration as liquidating agent. A deal was worked out by the NCUA to sell assets of the failed Spokane, Wash.-based credit union to Alaska USA Federal Credit Union of Anchorage and Numerica Credit Union of Spokane.

The Union Credit Union had $12 million in assets and 3,115 members at the time of its demise. The NCUA said it was the 17th federally insured credit union liquidation this year. Mortgage Daily has tracked the failure of 20 credit unions during 2010.

An Oct. 22 letter from Dover Mortgage Co. advised mortgage broker clients that "drastic" industry changes, including increased regulatory and compliance pressure, led to a decision to discontinue wholesale lending. Resources will be focused on retail originations.

Dover stopped accepting new broker loans on Oct. 30 and plans to close out the pending pipeline by Nov. 30.

"Rest assured that mortgage lending at Dover is alive and well, and that our company is performing at a strong level," the letter, posted by Mortgage-Lender-Implode-0-Meter, said. "This is simply a matter of recognizing and adapting to critical changes taking place in the mortgage industry.

Charlotte, N.C.-based Dover, however, said it is actively seeking new retail branches and loan officers.

In all, 180 mortgage-related entities have failed or been closed during 2010 based on data tracked by Mortgage Daily.

Nov. 5, 2010, Bank Failures
Bank Location Regulator Deposits (mil) Deposit prem. paid Assets (mil) Home Loans (mil) CRE Loans (mil) C&D (mil) Year Founded # Emp Acquirer FDIC Loss-Share Amount (mil) Deposit Ins. Fund Losses (mil)
First Vietnamese American Bank Westminster, California FDIC, California Department of Financial Institutions $47 million 0.00% $48 million $2 million $26 million $3 million 2005 15 Grandpoint Bank $0 million $10 million
K Bank Randallstown, Maryland FDIC, Maryland Office of Financial Regulation $500 million 0.00% $538 million $150 million $82 million $146 million 1961 125 Manufacturers and Traders Trust Co. acquired $411 million in assets $289 million $198 million
Pierce Commercial Bank Tacoma, Washington FDIC, Washington Department of Financial Institutions $194 million 1.00% $221 million $36 million $40 million $22 million 1997 29 Heritage Bank $0 million $21.3 million
Western Commercial Bank Woodland Hills, California FDIC, California Department of Financial Institutions $101 million 0.50% $99 million $1 million $35 million $12 million 2006 16 First California Bank $84 million $25 million

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