Bank Failures, Current Events, Meltdown

Colonial BancGroup FAIL

From MarketWatch:

Colonial BancGroup Inc. became the largest bank failure this year after the Federal Deposit Insurance Corporation seized the struggling Alabama-based lender Friday and sold it to BB&T Corp.

Late Friday, the FDIC announced four other banks had been closed: Community Bank of Las Vegas and its Arizona subsidiary, Community Bank of Arizona; Union Bank, Gilbert, Ariz; and Dwelling House Savings and Loan, Pittsburgh.

The Colonial BancGroup deal will knock roughly $2.8 billion off a pool of money, known as the Deposit Insurance Fund, which the FDIC maintains to guarantee bank customer deposits.

Lost in much of the Colonial implosion is the effect this may have on independent mortgage bankers. Aside from providing the primary warehouse line to Taylor Bean and Whitaker (which crashed and burned in spectacular fashion last week), Colonial held roughly 25 percent of the warehouse lending market.

A lot of mortgage brokers will simply have no other place to go.

Failure, originally uploaded by Diana Pinto.

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