The U.S. Office of Thrift Supervision ordered First Marblehead Corp. on July 2 to reduce its concentration of private student loans, according to published reports.
The move is designed to lower risk, but could cause a significant loss.
Reports said that First Marblehead stated the market disruptions have kept Union Federal Savings Bank from securitizing new loans since September 2007, resulting in more loans on the books then expected when they purchased the bank with OTS approval in late 2006.
According to the regulatory filing, First Marblehead agreed to OTS oversight while Union Federal agreed to a cease-and-desist order.
The agreements set minimum capital and deposit requirements for the bank, and require a new business plan to be submitted by Union Federal within 60 days covering the fiscal period through 2012. Additionally, OTS approval must be granted before Union Federal distributes any golden parachute payments to departing officials.
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The trust employs a 24-month revolving period. There is an increased risk that collateral quality could deteriorate as the transaction evolves with new collateral.
March 27 - Yahoo Finance Feed
The banking giant has launched an online platform that links small-business owners and entrepreneurs in need of capital to community development financial institutions. The platform was developed in partnership with Community Reinvestment Fund USA.
March 27 -
Audited financials, proof of fidelity bonds and errors and omissions insurance must be provided on Ginnie Mae Central after May 13.
March 27 -
Aside from the cash flow stabilization, another credit positive to the deal, TAH Operations is property manager to the portfolio, and has strong processes and controls.
March 27 -
Four tranches of class A notes make up the capital structure, and they all benefit from 3.00% in total initial hard credit enhancement.
March 26 -
Seven of the loans, 27.7% of the pool balance, are secured by multiple properties or have a component of cross-collateralization, benefitting from greater cash flow stability.
March 26