No, not Countrywide but a significant demise nonetheless. I’m talking about Netbank, the $2.5 billion online bank in Alpharetta, Georgia which received notice from the FDIC last week.
Netherlands-based ING Bank, part of financial giant ING Groep, will assume $1.5 billion of NetBank’s insured deposits and its customers will automatically be transferred to ING. ING will also acquire $724 million in assets.
Can you guess the catalyst?
NetBank sustained significant losses last year “primarily due to early payment defaults on loans sold, weak underwriting, poor documentation, a lack of proper controls, and failed business strategies,” the Office of Thrift Supervision said in a statement.
My comment: Note to Treasury Secretary Hank Paulson: The credit contagion is spreading like wild fire.