Mortgage Daily Logo

CRE, C&D Loans Kill Mo. Bank

Mortgage News

Risky commercial mortgages and loans to finance construction-and-development projects sank a bank in the St Louis area. A loss-sharing arrangement made the deal more attractive for the winning bidder.

Last week’s only bank failure was 24-year-old Truman Bank.

The Missouri Division of Finance seized the Clayton, Mo., bank, Friday after management failed to obtain additional capital and the board of directors voted to turn the 56-employee company over to the state.

“The demise of this bank is the result of aggressive, imprudent lending decisions made by prior management,” Missouri Commissioner of the Division of Finance Richard J. Weaver said in a statement. “Many of these loans were in high-risk commercial real estate and development projects that proved uncollectible. The bank has operated under close regulatory scrutiny since 2008.”

In April, Truman Bank was hit with a prompt corrective action by the Federal Reserve Board of Governors.

The Federal Deposit Insurance Corp., which was named receiver of the financial institution, awarded the winning bid for the failed bank to Simmons First National Bank.

Simmons picked up all of Truman Bank’s $282 million in total assets including $54 million in residential one-to-four unit loans, $91 million in commercial real estate loans and $31 million in construction-and-land-development loans.

Simmons also assumed all of Truman Bank’s $246 million in total deposits.

Factoring in a $118 million loss-sharing agreement, the FDIC projected that losses to the Deposit Insurance Fund from last week’s single bank failure will reach $34 million.

Truman Bank was the 42nd federally insured bank to fail so far during 2012 and the 68th mortgage-related business to close so far this year as tracked by Mortgage Daily.

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