How a Bank Lost $200 million Onlineposted by MR WAVETHEORY at 2/22/2007 12:19:00 AM
The problem looks like lending which is just another way of saying the credit market is turning (for the worse)
NetBank has been shedding business units rapidly. In 2006 it sold, exited, or shut down its non-conforming mortgage operation; its RV, boat, and aircraft financing business; its Financial Technologies Inc. subsidiary and QuickPost service; and NetInsurance. In December it "substantially effected" a shutdown of its auto lending unit.
They must have really gone out on a limb with these RV borrowers and trailer park residents! I'm not busting the chops on people who live in RVs, but any lender should know that people who live in RVs well ... they're financially challenged and might have trouble paying back the loan. Get a whole portfolio of these borrowers like NetBank and it's like lighting a match and tossing it on a barrel of kerosene. Poof! $202 million!