FDIC closes Net Bank

[brewer12345]

A point of clarification: netbank didn't go belly up because of loan losses. They went bust because they had a lousy business model and have been floundering & losing money for years. I've been watching their descent into the abyss for a while and wondering when the jig would finally be up. Now we know.

 

[twaddle]

Looks like lending losses didn't help:

OTS Appoints FDIC Receiver of NetBank


NetBank sustained significant losses in 2006 primarily due to early payment defaults on loans sold, weak underwriting, poor documentation, a lack of proper controls, and failed business strategies. As a result, the OTS executed a formal enforcement action with NetBank in 2006 directing the institution to correct its operating deficiencies and enhance its capital position. While the institution continued to operate in excess of minimum capital standards, the actions taken to address these problems were unsuccessful and it became clear that high operating expenses combined with continuing losses were jeopardizing the institution’s viability.