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Warren Bank - Retail, Wholesale

2009-10-28

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stories: freep.com, detroitmakeithere.com, fdic.gov, michigan.gov, freep.com

Update - 2009-10-30: Based on additional information recently received, we're happy to report Warren Bank Mortgage Co. LLC was salvaged from the demise of its parent, Warren Bank, and is being resurrected under new ownership and a new name.

In a memo on 2009-10-01 -- the day before the FDIC stepped in to take Warren Bank into receivership -- former Warren Bank V.P. Philip Candela made the following announcement to brokers:

"As of late this afternoon, an agreement has been signed between Warren Bank and First Independence Bank, and Warren Bank Mortgage Company, LLC will now be known as Independence Mortgage Company. We will be a division of First Independence Bank."

We spoke with Candela, now a V.P. for First Independence Bank in Detroit, MI. He told us the deal had gone through in advance of the FDIC's action and they would be up and running as Independence Mortgage Company as of Monday, November 2nd.

Perhaps the best news of all here, Candela told us the entire mortgage operations staff of 26 people from Warren Bank had been brought along, their jobs preserved. He can now be reached at pcandela@imcoloans.com.

Original Posting - 2009-10-28: Earlier this week the Detroit Free Press ran an article about one couple's experience dealing with the FDIC when the bank they obtained their construction loan from was seized by authorities. Work on their new home had to be stopped and now both the borrowers and their builder are on the hook for thousands that were supposed to be forthcoming in the form of a construction draw from Warren Bank. More than likely, they are not alone.

"FDIC spokesman David Barr said in situations like this, borrowers are encouraged to find other financing. Loans and real estate with Warren Bank were not sold to Huntington Bank, just the cash and marketable securities, he said.

Barr said that the FDIC is deciding how to handle the loans on a case-by-case basis, but it is not able to deal with them as a bank would since it is liquidating assets to pay off creditors of Warren Bank."

The mortgage lending operations of Warren Bank and its subsidiary Warren Bank Mortgage Co. LLC (view snapshot) came to an abrupt end on 2009-10-02 when the State of Michigan's Office of Financial and Insurance Regulation appointed the FDIC as receiver. The community bank's deposits were acquired by Huntington National Bank of Columbus, OH. It was the 96th bank failure in 2009.

It appears Warren Bank operated both a retail and wholesale origination channel, the latter accounting for the vast majority of their production. HMDA data available via AllMortgageDetail.com indicates Warren Bank Mortgage Co. LLC averaged $22.6 million in loans per month during 2008 while parent Warren Bank originated less than $2 million for the entire year. Call reports on file with the FFIEC for 2008 indicate all residential mortgage originations were accomplished through the wholesale channel. The bank also offered both residential and commercial construction loans and home equity lines of credit.

Crain's Detroit Business reported that Huntington would retain "40 of its 100 or so employees as temporary staff." It was noted that some employees involved in handling "current loans, loan collateral and assets seized by collections or foreclosure" were retained as temporary employees of the FDIC.

Our 2009-10-05 report on the bank's failure is posted over on BankImplode. Feel free to email us if you can provide more specific info about the mortgage operations.


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Important: This company is on our list of lending operations that have "imploded". However, please note that "imploded" is a somewhat subjective and does not necessarily mean operations are ceased permanently: it can mean bankruptcy filing, temporary but open-ended halting of major operations, or "firesale" acquisition. All information here is provisional, and may contain inaccuracies (especially newer information). If you are planning on doing business with this company or any other one listed on this site, you should inquire with them directly on whether they can still meet your needs. Many are still operating in some capacity.