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Mortgage defaults lead to NetBank shut down
September 27, 2007
CNNMoney.com:The government has shut down NetBank, the online bank with $2.5 billion in assets and the parent of the former ATM independent sales organization NetBank Payment Systems Inc. The bank, which has struggled to regroup,in Maysold its ATM subsidiary to Payment Alliance International for $18 million. NetBank was reportedly shut down because of an unsustainable level of mortgage defaults. NetBank, which had no physical branches, "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," the Office of Thrift Supervision said in a statement.
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