| PRESSÂ RELEASE
Bank Failures Sink DALLAS — (Oct. 3, 2011) /PRNewswire/ A 42% decline in bank failures this year has mortgage-related casualties sinking from 2010. But litigation against former management at those firms is up. By this point in 2010, MortgageDaily.com had tracked 158 mortgage-related firms and businesses that had failed or closed. So far during 2011, the casualty list stands at just 105. The improvement is the result of fewer bank failures. This year, 74 federally insured banks have failed versus 127 that had failed by this point last year. There was no change, however, in the number of failed credit unions and nonbank lenders.
But despite the respite in bank casualties, former executives and directors of failed banks have faced more lawsuits by the FDIC. Among those institutions are IndyMac Bank, Silverton Bank and First National Bank of Arizona. The FDIC reported that it had authorized lawsuits against 266 individuals for director and officer liability in connection with 30 failed institutions as of Aug. 4. Damage claims exceed $6 billion. The FDIC, however, isn’t the only one suing. Irwin Financial Corp.’s bankruptcy trustee filed a lawsuit against the former chairman and two executives seeking more than $0.5 billion. The trustee also sued the FDIC, claiming that banking regulators diverted a large tax refund and pressured Irwin executives to improperly infuse capital. But the court in lawsuit by the NCUA against former officials of WesCorp ruled that the defendants weren’t liable. A federal judge found that the former CEO and head of operations at failed Topdot Mortgage were liable for unpaid wages and overtime of 166 former employees. This year’s high-profile casualties include Integra Bank, which had $2.2 billion in assets; Lydian Private Bank, which had $1.7 billion in assets; and $1.1 billion Bank of Choice. PMI disclosed that regulators ordered it to stop writing new policies. Bank of America said it will sell or close its correspondent lending unit. Nationstar Mortgage LLC is rumored to be conducting due diligence as part of a bid to acquire the unit. |
|||||||||||||||
|
Complete details about all failed and closed mortgage companies and operations are available at: About MortgageDaily.com CONTACT: Source: MortgageDaily.com |
