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Friday, May 09, 2008

Fremont General may file BK

by Calculated Risk on 5/09/2008 09:37:00 AM

From Reuters: Fremont General says may file for bankruptcy

Fremont General ... on Friday said it may file for bankruptcy protection.

The company ... said that absent another "viable transaction" for remaining assets, it expects to file for Chapter 11 protection from creditors.
Fremont was the recipient of an ugly Cease and Desist Order issued by the FDIC last year:
In taking this action, the FDIC found that the bank was operating without effective risk management policies and procedures in place in relation to its subprime mortgage and commercial real estate lending operations. The FDIC determined, among other things, that the bank had been operating without adequate subprime mortgage loan underwriting criteria, and that it was marketing and extending subprime mortgage loans in a way that substantially increased the likelihood of borrower default or other loss to the bank.
So much for Fremont. I'd expect some more bank failures soon.