|As state banking regulators closed a Utah institution, Thornburg Mortgage Inc. reached the end of the line.
America West Bank was closed by the Utah Department of Financial Institutions on Friday. The Federal Deposit Insurance Corporation was appointed receiver of the Layton bank.
Amerca West was founded in 2000. At the end of last year, 58 employees worked for the firm.
Earlier this year, the company entered a written agreement with the Federal Reserve Board to conserve capital, improve compliance and report back. Late last year, the FDIC issued a final cease-and-desist order against America West.
Cache Valley Bank agreed to assume all of the failed bank's $284 million in deposits at an $0.4 million discount. Cache acquired $11 million of America West's assets, which stood at $299 million as of Dec. 31 -- including $10 million in residential loans, $24 million in commercial mortgages and $178 million in construction-and-land-development loans.
Losses to the FDIC from America West's collapse are estimated at $119 million.
Including two other financial institutions to fail Friday, 32 FDIC-insured banks have failed this year.
Also on Friday, beleaguered Thornburg filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in U.S. Bankruptcy Court for the District of Maryland, according to a filing with the Securities and Exchange Commission. Also filing were subsidiaries ADFITECH Inc., Thornburg Acquisition Subsidiary Inc., Thornburg Mortgage Home Loans Inc. and Thornburg Mortgage Hedging Strategies Inc.
The former jumbo lender had originally warned of its bankruptcy plans last month.
Thornburg's problems began in August 2007 when the secondary market for adjustable-rate mortgage-backed securities and mortgage loans nearly collapsed. The company had successfully staved off margin calls, but it was ultimately unable to ovecome a drop in the value of its securities.
Thornburg Investment Management Inc., which operates in the same office complex and manages Thornburg Mortgage Inc., is not tied to the bankruptcy filing.
Debtors in posession have been established.
The Santa Fe, N.M., company plans to liquidate its remaining assest in an orderly fashion.
ADFITECH, which provides quality control services, continues to operate as a going concern.
"The company is working expeditiously with its advisors to sell ADFITECH for the benefit of creditors," the filing stated.
Including Thornburg and America West, MortgageDaily.com has tracked 68 mortgage-related failures and closings.
ADFITECH Inc. case number 09-17788,
Thornburg Acquisition Subsidiary Inc. case number 09-17790
Thornburg Mortgage Home Loans Inc. case number 09-17791
Thornburg Mortgage Inc. case number 09-17787
Thornburg Mortgage Hedging Strategies Inc. case nubmer 09-17792
May 1, 2009 (all filed in U.S. Bankruptcy Court for the District of Maryland).