Banks Face Mergers, Regulatory Orders
A new real estate investment trust is being launched, an order was issued against a bank officer accused of mortgage fraud and Fannie Mae and Freddie Mac faced grand jury subpoenas and securities regulatory inquiries. Meanwhile, dozens of other banks faced a host of regulatory orders and a growing number of institutions face mergers.
But first, Tennessee Valley Financial Holdings Inc. reported last week in a Securities and Exchange Commission filing that its subsidiary, TnBank of Oak Ridge, holds $2.2 million in preferred stock of the government sponsored housing enterprises. But even if those holdings become worthless, TnBank will remain well-capitalized.
Franklin Bank Corp. was granted a reprieve on its NASDAQ Stock Market listing. A notice it said it received from the Nasdaq Listing and Hearing Review Council granted the Houston-based firm a stay on its continued listing while the council evaluates the request and Franklin regains compliance.
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Struggling to Survive
More financial institutions revealed their exposure to investments in the government sponsored enterprises -- with two warning that their capital standing would be impaired. The collapse in value of some Fannie Mae securities have prompted a class action against several investment bankers tied to the offering. Impac Mortgage Holdings reported a significantly lower first-half loss.
More Thornburg Warnings
Thornburg Mortgage Inc. paints a bleak picture of the current state of the mortgage market and its own ability to continue as a going concern. The jumbo lender has stopped originating new business, faced massive downgrades on its mortgage-backed securities and been hit with ongoing margin calls.
Losses, Lawsuits and Solvency
With earnings season in full force, losses continued to mount, more lawsuits were filed and executive appointments were announced. Meanwhile, other firms are acquiring or investing in mortgage-related companies as solvency is becoming a growing issue. A REIT has expanded its servicing capabilities with a recent asset acquisition.
GSEs Overshadow Mortgage Sector
As the mortgage sector grapples with stormy financial markets, all eyes are on Fannie Mae and Freddie Mac -- which saw their shares traded at their lowest levels in more than 15 years. Meanwhile, two real estate investment trusts disclosed financial information.
REIT & Exec Shakeups
Two mortgage real estate investment trusts are teetering in the brink of insolvency, the president of a nonprime lender has been ousted and IndyMac is facing its fifth investor lawsuit since last month. But another REIT is optimistic after restructuring a repurchase agreement, while a servicing operation has successfully traded hands.
Acquisition, Collapse & Regulatory Actions
A California credit union collapsed and an Ohio bank expanded its mortgage operations with the acquisition of another bank. Dozens of other financial institutions are dealing with a host of legal and regulatory actions, while a hard-money wholesale lender is streamlining operations with the help of a third party. Three real estate invstement trusts also made announcements.
Acquisition Done, Merger On
A small mortgage company has been acquired by a big bank, while two small banks have agreed to merge. Other corporate activity includes a real estate investment trust struggling to generate earnings and a New York-based lender that said it has been approved to issue securities backed by loans insured by the Federal Housing Administration.
Banks In Play
As the bankruptcy of a bank-holding company enables the sale of its subsidiary, another bank is being acquired by a financial behemoth. A third bank is hoping a successful public offering will boost its capital. Meanwhile, a real estate investment trust has unloaded all of its repurchase agreement financing with non-related third parties.
