The Office of Thrift Supervision closed down NetBank Inc. a thrift with $2.5 billion in assets, and appointed the Federal Deposit Insurance Corp. as receiver.
The OTS said the bank experienced significant losses beginning in 2006 due to defaults on loans sold, weak underwriting, poor documentation, a lack of proper controls and failed business strategies.
It was only the second bank failure in the past three years.
The FDIC said ING Bank has agreed to assume $1.5 billion of the failed bank's insured deposits.
Now for the really bad news; from the same article:
"NetBank had about $109 million in 1,500 deposit accounts that exceeded the Federal deposit insurance limit of $100,000. Those customers will become creditors of NetBank's receivership, the FDIC said."