California bank brings U.S. failure tally to 48

MarketWatch ^ | April 16, 2010 | John Letzing

[Cheap_Hessian]

SAN FRANCISCO (MarketWatch) -- Oakland, Calif.-based Innovative Bank was closed by regulators Friday, marking the 48th U.S. bank failure of 2010.

[Cheap_Hessian]

From earlier today: Bank-failure tally grows to 47 for year

Fifty failures so far this year, after 8 failures today. FDIC Source

For more information from Reuters: Bank failure Friday

[tcrlaf]

In November, Innovative Bank was awarded the S.B.A.’s Silver Award for giving away 2.9 Mill of SBA loans to “Disadvantaged and Minority” small business startups.

AND YOU WONDER WHY THEY WENT BANKRUPT??

[bootless]

So, what happens to the SBA loans if the originating bank goes under?

[Attention Surplus Disorder]

“So, what happens to the SBA loans if the originating bank goes under?”

Not much different than a FNM or FRE or any other form of Fed-guaranteed loan, really. The originating bank collects a fee for assembling and verifying the origination papers, then resells the loan to some bureau of the Fed gov’t. Meaning, yes, you guessed it, the US Tsy and thus the US taxpayers. You and I own those loans now. Neat, huh?