Mortgage Daily Logo

2 Financial Institutions Fail Last Week

Mortgage News

Mortgage Daily

                                                 July 29, 2012

Two financial institutions failed last week. One of the casualties, a $217 million bank, was in Georgia — which already had more failed banks during 2012 than any other state in the country. The other entity is in Colorado, and a big share of its customers apparently speaks Spanish.

Jasper Banking Co. was established on March 12, 1945, as a federally insured bank.

But by 1999, the company was in trouble with bank regulators. The Federal Deposit Insurance Corp. issued a cease-and-desist order against the Jasper, Ga., bank in September of that year.

While the cease and desist order was terminated the following January, the 44-employee firm apparently ran into trouble again.

On Friday, the Georgia Department of Banking and Finance took possession of Jasper pursuant to the Official Code of Georgia, Section 7-1-150(a), which authorizes the department to take possession of any state-chartered financial bank when it is either insolvent, operating in an unsafe or unsound condition to transact its business or is operating in violation of any court order, statute, rule or regulation. The state can also seize a bank when the bank requests the department to take possession of its business and property.

As of March 31, the failed bank had $213 million in total deposits and $217 million in total assets including $26 million in residential loans, $36 million in commercial real estate loans and $12 million in construction-and-land-development loans.

The FDIC, which was appointed receiver of Jasper Banking, conducted a secret bidding process and awarded the winning bid to Stearns Bank, N.A., which assumed all of its deposits and acquired all of its assets.

The bank’s failure is expected to deplete the Deposit Insurance Fund by $58 million.

Out of the 39 FDIC-insured bank failures so far this year, nine were in Georgia — the worst of any state in the country.

But Jasper Banking wasn’t the only financial institution to fail Friday.

The Colorado Division of Financial Services placed Trinity Credit Union into conservatorship. The National Credit Union Administration was appointed receiver and assumed control of service and operations.

“The Federal Credit Union Act authorizes the NCUA Board to accept appointment as conservator when necessary to conserve the assets of a federally insured credit union, protect members’ interests or protect the NCUSIF,” an NCUA statement said.

The $4 million credit union has more than 1,100 members who are residents of Las Animas County, Colo. Apparently many of Trinity’s members were Hispanic because the credit union regulator also issued a notice about its failure in Spanish.

The NCUA will continue to operate Trinity while working to resolve issues affecting the institution’s safety and soundness.

Trinity was the fourth credit union placed into conservatorship this year and the ninth credit union to fail so far during 2012.

Mortgage Daily has tracked to demise of 62 mortgage-related entities from January through July.

Related Posts

Federal Housing Administration$1,224.5 billionDec. 31

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...

Federal Housing Administration$1,224.5 billionDec. 31

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...

Federal Housing Administration$1,224.5 billionDec. 31

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...

Federal Housing Administration$1,224.5 billionDec. 31

Mortgage Servicing 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 BAC Home Loan...

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