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Saturday, September 29, 2007

Netbank goes under due to mortgage defaults

The current mortgage mess has caused problems for another bank - this time a major online bank - NetBank, Inc. As per an article on Yahoo Finance, the bank had $2.5 billion in assets and was shut down by the government on Friday, September 28, 2007 due to an excessive level of mortgage defaults. However, since the bank was FDIC-insured, customers with less than $100,000 deposited with NetBank will be protected by FDIC insurance.

"Customers of NetBank should have confidence and security knowing that they will have access to their insured funds in a timely and orderly manner," FDIC Chairman Sheila Bair said in a prepared statement.

About $1.5 billion of NetBank's insured deposits will be assumed by ING Bank which will pay $14 million for the deposits and receive 104,000 new customers.However, the bank had $109 million in deposit accounts that exceeded the FDIC limit of $100k.

Those customers will become creditors in NetBank's receivership, the FDIC said.

I used to have an account with them but fortunately, closed it earlier this year. However, if anyone still has an account with them, you can contact the FDIC at their toll-free number: 1-888-256-6932.

For complete article, see:

Yahoo.com: FDIC Shuts Down NetBank Due to Defaults

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posted by Ruby @ 7:18 AM

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