Home Loan Investment Bank Cease and Desist- What you Need to Know
Overview
Founded in 1959, Home Loan Investment Bank is a customer-driven banking institution. The bank strives to offer products and services that add real value to customers.
Services offered by the bank include:
- Retail banking
- Residential lending
- Commercial lending
- Automobile financing
- Home Improvement lending
- Small Business Financing
The bank is one of the pioneers of non-conforming mortgages.
In 2009, a Home Loan Investment Bank cease and desist order was issued. The bank in Warwick was ordered by federal regulators to reduce the amount of problem loans in its portfolio.
What this meant was that the bank had to establish a schedule of quarterly targeted reductions in Problem Asset Ratios. The bank also had to describe in detail the means by which it would do this.
What is a cease and desist order?
This is an order given by a government administrative agency or the courts to stop any suspicious or illegal activities.
The courts place an injunction on a company or a person, prohibiting the activities that are deemed suspect.
What led to the Home Loan Investment Bank cease and desist?
In 2007 the US economy entered a mortgage crisis, which was a result of too much borrowing. Greed and fraud also played pivotal parts in this crisis.
How it started was that home prices at the time skyrocketed, so more borrowers had plenty of equity, which they refinanced, or took out second mortgages on.
People at the time also qualified for mortgages with little or no documentation. Banking institutions failed to do due diligence and provided individuals with bad credit sub-prime mortgages.
As a result, people who could not afford mortgages were approved for finance.
Eventually interest rates rose and homeowners discovered that they could not afford their homes and many of them defaulted on their mortgages.
