Tag Archives: FDIC

The FDIC filed a lawsuit last week against three former Washington Mutual (WaMu) executives and two of their wives, alleging that they ran the bank into the ground in order to fatten their own wallets. The lawsuit says former WaMu CEO Kerry Killinger, former COO Stephen Rotella, and home loans president David Schneider focused on short-term gains to increase their own compensation, while encouraging risky mortgage lending when they knew the housing market was about to collapse.

The first full week of March saw no bank shut-downs, but that lull came to a quick end as regulators seized control of two community-based lenders Friday evening - First National Bank of Davis in Oklahoma and Legacy Bank in Milwaukee, Wisconsin. They bring the number of names on the FDIC's failed bank list to 25 for the 2011 calendar year.

In a break from the typical multiple institutional closings that have become the norm of any given weekend for the last couple of years, regulators took control of just one community-based lender Friday evening -- Valley Community Bank in St. Charles, Illinois. The seizure of Valley Community brings the number of names on the FDIC's failed bank list to 23 for the 2011 calendar year.

Another lawsuit may join the ranks of suits against banking executives for their part in the housing collapse. There are reports that the Federal Deposit Insurance Corporation (FDIC) is said to be considering a lawsuit against former executives of the now defunct Washington Mutual bank, for alleged fraudulent lending practices. The government agency may seek up to $1 billion in damages. The FDIC took control of Washington Mutual and sold it to JPMorgan Chase for $1.8 billion in 2008.

Two community-based lenders in California and two in Georgia were shut down over the weekend by banking regulators. These latest closings bring the number of names on the FDIC's failed bank list to 22 for the 2011 calendar year to date. The FDIC has said it expects the number of bank closures in 2011 to be less than the 157 that failed in 2010. But if the pace of 20-plus every two months continues, institutional failures will remain extremely elevated by historical standards.

When evidence surfaced last fall of flawed foreclosure documentation and robo-signers within some of the nation's largest servicing shops, federal regulators launched an investigation into the foreclosure and servicing practices of 14 companies. Officials say they've uncovered ""critical deficiencies and shortcomings"" and will be enforcing sanctions and penalties against servicers and developing a set of national mortgage servicing standards for the industry.

Rowell Auctions, Inc. has announced the hiring of Douglas G. Dennison as national sales coordinator for the firm. Dennison has 20 years of auction experience and has specialized in large real estate government auctions throughout the country. He has served as auction project manager for the FDIC, U.S. General Services Administration (GSA), U.S. Marshals Service, Small Business Administration (SBA), Resolution Trust Corporation (RTC), and U.S. bankruptcy auctions in more than 30 states.

Veros, a provider of collateral valuation technology, enterprise risk management, and predictive analytics, recently released a white paper titled ""Interagency Appraisal & Evaluation Guidelines: Insights into Understanding and Integrating the New Guidance."" The white paper seeks to clarify the expanded language in the guidelines issued by federal regulators last December.

State and federal regulators have shut down four more community-based lenders. This latest round of closings targeted institutions in California, Florida, Michigan, and Wisconsin, and brings the number of bank failures so far in 2011 to 18. Peoples State Bank in Hamtramck, Michigan, was the largest of last weekend's failures and the only one which carried a loss-share agreement from the FDIC.

Organizations from every corner of the industry are weighing in on the administration's proposal to reform the nation's housing finance system. A number of groups are throwing their support behind the long-term reform option that calls for a group of private companies to provide guarantees for well underwritten mortgage securities, and the federal government to offer investors a type of reinsurance on these bonds. There are some, though, who say even this more prudent approach will raise borrowing costs and push small businesses out of the market.