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Excessive mortgage defaults cause NetBank shutdown

3 years ago, I remember a Northern Virginia retail broker chastising me (a wholesale A.E.) for not accepting a risky EA-III Fannie loan. They said I needed to be more like NetBank. They take everything, he said. This morning, I cheerfully forwarded this article to them. Thanks for making my day, Mortgage-Implode!

Net Bank is nothing. Wait until all the bogus loans in teh Alt-A portfolios become public knowledge. Sub-Prime is a drop in the bucket compared to what is securitizing some of these Wall Street houses portfolios of MBS's.

We found NetBank to be pretty good for alt-a. They never got into sub-prime (other than FNMA), but were heavy into alt-a stuff. I don't know about them turning a blind eye to bogus stuff because we never would allow that practice ourself. NetBank is out of business and your sleazy No. Virginia Broker that put them there is still writing loans. Nice.

Netbank owned Meritage Mortgage which went out of business December 13, 2006. I am sure that had some effect on them. To anonymous, I would say that this shows that this entire industry needs to be cleaned from top to bottom. That includes lenders, brokers, realtors, Wall Street and even the borrowers. Poor loan quality and fraud come from all of these sectors. Our mentality regarding debt in this country needs to change too. I too am an AE and I can tell you that from what I can see Fannie Mae is taking in quite a few loans with DTI's in the mid 60's which in my view is ludicrous. Those kinds of loans cheapen their portfolio. I hope the crisis doesn't spread too much further.

Netbank went out of business becasue of the good ole boy system. Their CEO hired his buddies that came and wouldn't fire them when they didn't produce. They spent the profits made during 2003 on real stupid businesses that made them no money. Its hard to untangle the web of bad business decisions when your profits are based on a volitale mortgage business.... good bye and good luck!

Net Bank also had a retail mortgage operation by the name of Market Street Mortgage doing over 3.2 billion a year in a number of States. Any idea of what is to become of them? I hear they wrote high quality paper and would now be without a warehouse line.

I would like to dispute Anonymous with the fact that Netbank would accept any loan. As a former AE of Netbank I can tell you that is not correct. Netbank could be very conservative on what they were doing. I do believe that Meritage had a lot to do with Netbank's failings. When RBMG was absorbed by Netbank it appeared that the focus went soley on the bank vs. the mortgage division. I also believe that this was also the cause. Netbank was a great company to work for and although I was not prevy to the banking business side I do think that maybe the bank was ill run.

Just the beginning of the straight line to the biggest depression WORLDWIDE!How many trillions of dollars in loan are floating out there right now? We also tend to forget many people who were not subprime borrowers are losing their homes as well. Can you say ARM??I am not gloating on my gloom and doom scenario. I am stating the bad news that is prevalent in the news lately like new homes sold, banks going under, and people losing their jobs in droves is relative to the great depression of the 30's. Many people are to blame but we all had to sign on the dotted line. Let the market shake out all those idiotic enough to bite off more than they could pay for. I also feel that bailing people out is wrong on all counts. I don't get bailed out if I need help so why should they! I am sure whenthey signed on the dotted line and bragged about the worth of their home not they did not think about the government paying for it!Call it real estate Darwinism!

NetBank was bought out by ING and is up and running.