Subprime mortgages claim their first bank.

From this online writeup, we get the news that a bank..although just an online bank, but a bank none the less has collapsed due to their subprime lending practices:

FAILING sub-prime mortgages have claimed their first US bank — online lender NetBank was shut down by US Government regulators at the weekend.

Soaring defaults of home loans given to poor-quality borrowers in the US have closed dozens of mortgage companies and stressed British bank Northern Rock, but web-only lender NetBank is the first federally regulated bank in the US to go to the wall.

The Federal Deposit Insurance Corporation (FDIC) was named receiver by the Office of Thrift Supervision, NetBank’s primary regulator. With about $US2.5 billion ($A2.8 billion) in assets, NetBank is the 58th-largest bank failure in FDIC history.

NetBank is the largest US bank closure since 1993 and the first since February, when small regional lender Metropolitan Savings Bank of Pittsburgh shut its doors. FDIC did not cite the sub-prime crisis as a reason for Metropolitan Savings’ closure.

Mortgage standards in the US have fallen in recent years. Loans have been given on low introductory rates to borrowers with poor credit histories.

Add this to the problems Countrywide is having and the bat quano is hitting the fan. Too damn bad..my heart bleeds for these greedy bastards..NOT!