Posted on 08/03/2009 11:46:40 AM PDT by Petronski
ORANGE COUNTY, Fla. (WOFL FOX 35) - - FBI agents from the Washington, D.C. field office have raided a building in downtown Orlando.
The building raided is the Colonial Bank building on Pine Street. The FBI is working with the Office of the Special Inspector General for the Troubled Asset Relief Program which was established by the Emergency Economic Stabilization Act of 2008.
FOX 35 has a crew at the scene. Check back for updates.
Hat tip Karl Denninger:
http://market-ticker.org/archives/1286-FLASH-FBI-RAID!-Colonial-Building,-Orlando.html
local government grinds to a halt.
Why is this breaking news?
Because Colonial Bank is failing and desperate for a workout.
http://www.al.com/news/press-register/metro.ssf?/base/news/1249118134298290.xml&coll=3&thispage=2
FDIC has every reason to seize them but hasn’t yet. Such seizure could (would?) BREAK the FDIC.
Pinglists please.
As Drudge might say: BREAKING HARD...
ORLANDO, Fla. — Eyewitness News learned that federal agents are raiding a Colonial Bank building on Pine Street late Monday morning. Colonial Bank is the main tenant in the building.
The agents are taking out boxes of documents from the building in downtown Orlando. Investigators rented a Ryder truck that may be used to load the boxes of evidence.
The investigators who are at the scene issued two warrants. They are from a special unit for the Troubled Assets Release Program. Their job is to make sure the money is being used legally and in accordance to guidelines.
Colonial Bank is based in Birmingham Alabama and investigators have found that they gave bad real estate loans, mostly here in Florida.
Orlando police officers were at scene and say the FBI requested their presence.
WFTV.com will update the story as it develops.
http://www.wftv.com/news/20264182/detail.html
“We are cooperating with the federal government,” spokeswoman Merrie Tolbert told Bloomberg News today in an interview.
Specifics were not available in Bloomberg’s initial report.
Colonial on Friday reported a $606 million second-quarter loss and said it can provide no assurance that it can survive as a going concern. It also said a $300 million investment deal to shore up its balance sheet had collapsed.
http://blog.al.com/businessnews/2009/08/colonial_bancgroup_says_it_has.html
I suspect this is a problem developing at many other banks, but FDIC is scared $hitlees as it's their a$$ too!
OCALA - Federal agents descended on the Ocala headquarters of wholesale mortgage lender Taylor, Bean & Whitaker Mortgage Corp. Monday morning and locked it down.
***SNIP***
In April, TBW signed a agreement to put up half of a $300 million equity investment to help infuse the troubled Colonial BancGroup, holding company of Colonial Bank, with headquarters in Montgomery, Ala., and help the bank meet a regulatory deadline. Farkas said that deal ended Friday. At the time of the agreement, Colonial, which has suffered from heavy loan losses, had applied for funding under the U.S. Treasury’s TARP. To be eligible for TARP funds, Colonial was required to come up with $300 million in private equity.
On July 27, Colonial BancGroup consented to a Cease and Desist order by the Board of Governors of the Federal Reserve System and the Alabama State Banking Department.
Colonial, on Friday reported a second quarter loss of $606 million.
The Orlando Sentinel reported that the FBI and U.S. Treasury agents also raided the regional headquarters of Colonial Bank in downtown Orlando this morning.
***SNIP***
http://www.ocala.com/article/20090803/NEWS/908039996/1402/NEWS?Title=FBI-raids-local-business
Looks like it’s all part of one major clean up operation in Florida today.
Is the FDIC Broke and Covering it up?
He does the math and suggests that three big superregionals--Corus, Colonial and Guaranty--are insolvent but have not been seized because FDIC cannot afford it:
I believe the FDIC is broke and knows it; that under the law they should have seized these three banks (and many dozens more, including some really big ones) some time ago, but doing so will force them to tap the Treasury "emergency" credit line. They're well-aware that this could instill quite a bit of panic in the public (never mind Congress!); as such they, along with OTS and OCC are conspiring to (once again) hide the truth and pray for an economic recovery before they are forced to act as the law demanded months or even years ago!
It was bad enough that all the flippers who bought homes and condos way beyond their stated income should have allowed are now all upsidedown on their investments, but I bet many of the current loan losses are now being generated by all the unemployed no longer able to pay their mortgages which is the second shoe to drop. Plus commercial developers unable to rent/sell their properties and defaulting on their loans as well.
Huh? Actually, they are based here in Montgomery, Alabama.
Colonial Bancgroup Inc.
100 Colonial Bank Boulevard
Montgomery, AL 36117
United States
Phone: 334-676-5000
Fax: 334-676-5345
Web Site: http://www.colonialbank.com
Right next door to me...
I was just composing a post about that while you hit send.
Denninger’s website is the place to be these days, in a “I sure hope he’s wrong” kind of way.
WFTV dropped the ball on that one: Montgomery, NOT Birmingham.
It will be interesting to see if Sheila Bair has anything to say after the bell.
Colonial is one of the worst-managed banks in the country. It deserves to fail.
too bad they don’t investigate congress, that is where the real crime is going on now.
And if the FDIC could afford it, Colonial would fail.
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