Mortgage Daily Logo

Financial Institutions Go Down

Mortgage News

May was a busy month for the nation’s federal credit union regulator — though there was at least one success story. Two banks recently succumbed to hard times.

Banks of Wisconsin was seized Friday by the Wisconsin Department of Financial Institutions and closed down by the state banking regulator.

The Kenosha, Wis.-based company had $128 million in total deposits as of March 31, while total assets stood at $134 million — including $29 million in residential loans, $42 million in commercial real estate loans and $4 million in construction-and-development loans.

Banks of Wisconsin was founded in 2000. Staffing stood at 41 employees.

The Federal Deposit Insurance Corp., which was named receiver of the failed bank, awarded the wining bid to North Shore Bank, FSB.

North Shore assumed all of Banks of Wisconsin deposits but only purchased $97 million of its assets.

An FDIC cease-and-desist order was issued against Banks of Wisconsin in December 2009. In addition, the FDIC issued a $4,000 civil money penalty against the bank in March 2009 and a $4,450 civil money penalty in 2008, while the Federal Reserve Bank of Chicago entered a written agreement with parent Wisconsin Bancshares Inc. in August 2010.

The cost to the Deposit Insurance Fund as a result of the failure is expected to be $26 million.

Earlier last month, on May 14, the Arizona Department of Financial Institutions took control of Central Arizona Bank and named the FDIC receiver. Unlike most bank failures, which occur on Fridays, the Scottsdale, Ariz., bank was closed on a Tuesday. An FDIC spokesman clarified that the unusual step was taken due to a last-minute legal challenge on the preceding Friday.

Central Arizona Bank was established in June 2007 and employed just nine people.

All of its $31 million in deposits and $32 million in assets — including $5 million in home loans, $15 million in commercial mortgages and $1 million in C&D assets — were taken over by Western State Bank.

The FDIC estimated related losses at $9 million.

In all, 14 FDIC-insured banks have failed so far this year.

The National Credit Union Administration announced that it liquidated NCP Community Development Federal Credit Union in Norfolk, Va., last Friday. The 709-member institution, which had less than $2 million in assets, was placed into conservatorship in February.

“NCUA made the subsequent decision to liquidate NCP and discontinue operations after determining the credit union was insolvent and had no prospect for restoring viable operations,” the regulator said.

Also on Friday, In Selma, Ala., the NCUA liquidated First Kingdom Community Credit Union on Friday. Riverdale Credit Union of Selma assumed the less than $0.1 million in deposits of the credit union, which had just 76 members.

First Kingdom had originally been placed into conservatorship on May 16. The NCUA noted that liquidation “the best course of action for continued member service.”

Control of Arrowhead Central Credit Union, which was thrown into conservatorship in 2010, was returned to members last month, the NCUA announced. During conservatorship, a new leadership team was installed, the net worth ratio was increased from 3.0 percent to 10.5 percent and income swung from a nearly $4 million loss in 2010 to a nearly $6 million first-quarter profit this year. Membership has fallen from 152,000 to 116,000.

The San Bernardino, Calif., credit union was the first credit union to emerge from NCUA conservatorship since 2007. NCUA Chairman Debbie Matz called the turnaround “an extraordinary success story.”

On May 23, Electrical Workers #527 Federal Credit Union was liquidated by the NCUA. The regulator said that the Texas City, Texas, credit union “was insolvent and had no prospect for restoring viable operations.” Assets stood at less than $1 million, and membership was only 527.

Mortgage Daily has tracked the closing or failure of 30, mortgage-related entities so far during 2013 including nine credit unions.

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