Mortgage Daily Logo

3 Deceased Institutions

Mortgage News

It was a story that’s been told many times lately; a small bank that survived the Great Depression fell victim to the Great Recession. In all, three institutions met their demise last week.

Western Springs National Bank and Trust was shut down by the Office of the Comptroller of the Currency on Friday. Assets and earnings at the Western Springs, Ill., bank had substantially dissipated, the OCC said, because of “unsafe or unsound practices.” The institution was reportedly so undercapitalized that it wouldn’t have survived without government assistance.

Western Springs was established in 1916. As of the end of last year, 35 people were on staff. Its residential holdings were $54 million, while it also held $76 million in commercial mortgages and $16 million in construction-and-development financing.

An OCC prompt corrective action was issued against the failed institution in November 2010, while it was hit with an OCC cease-and-desist order a year earlier.

As was the case with both of Friday’s failures, the Federal Deposit Insurance Corp. was appointed receiver. After a secret bidding process, the FDIC selected Heartland Bank and Trust Co. as the winning bidder. Heartland picked up all of the $187 million in total asset of the failed bank, and the FDIC agreed to share in losses on $101 million of the assets. Heartland also assumed all of Western Spring’s $182 million in deposits.

Losses tied to Western Spring’s failure are estimated to hit $31 million.

After that, the Nevada Financial Institutions Division took over Nevada Commerce Bank and handed it over to the FDIC. City National Bank agreed to acquire all the bank’s $145 million in assets with the FDIC retaining liability for a portion of the losses on $111 million of the assets. City National also assumed all of the $136 million in deposits — paying an 0.71 percent premium in the process.

Nevada Commerce, established in 2000, was a 32-employee institution. Its home-loan assets were $6 million, and it owned $52 million in commercial real estate loans and $13 million in C&D loans. The FDIC issued a prompt corrective action against the bank in September 2010 and a cease-and-desist order in November 2009.

As a result of the Las Vegas bank’s failure, the FDIC estimates its Deposit Insurance Fund will be depleted by $32 million.

Nevada Commerce Bank was the 28th FDIC-insured bank failure during 2011.

Moving further west to San Francisco, the National Credit Union Administration reported that Mission San Francisco Federal Credit Union was placed into liquidation. The failed credit union’s assets, liabilities and members were immediately taken over by Self-Help Federal Credit Union.

Mission San Francisco was a tiny organization, with a mere $6 million in assets and 2,500 members. It was formed in 1971 to serve the Mission District.

Mortgage Daily has tracked the failure of seven credit unions so far this year.

Including nonbank mortgage lenders, the casualty count for 2011 stands at 40 mortgage-related firms.

Related Posts

Centex Home Equity Announces Name and Brand Change to National Mortgage, LLC

Third-Quarter 2012 Mortgage Litigation Index

Lawsuits involving excessive fees, servicing fees and loan fees beyond state maximums. Defendant Plaintiff Court Amount Overview Case Title Case Number Date Filed Date of Activity Link to Story Fannie Mae and Freddie Mac Orangeburg County, Richland County, South...

Centex Home Equity Announces Name and Brand Change to National Mortgage, LLC

Net Branch Lawsuits

Litigation involving net branch operations. Defendant Plaintiff Court Amount Overview Case Title Case Number Date Filed Date of Activity Link to Story PHH Mortgage Corp. Mathews Supreme Court of Virginia na Court held that the term "branch office" includes not only...

Centex Home Equity Announces Name and Brand Change to National Mortgage, LLC

Whistleblower Lawsuits

Litigation related to loan servicing, including escrow issues, transfer of servicing and servicing borrowers in bankruptcy and foreclosure.   Defendant Plaintiff Court Amount Overview Case Title Case Number Date Filed Date of Activity Link to Story Bank of...

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming paperwork has been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and furniture need to...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand-new mortgage loan can be a difficult task, especially for first-time homeowners.   After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first...

Newsletter

Don’t worry, we don’t spam