Mortgage Mistakes Tank NetBank

by Broderick Perkins
© 2007 DeadlineNews.Com

Deadline Newsroom – Alpharetta, GA-based NetBank Inc., the first online bank to tank, in part, because of mortgage market missteps, is also the first federally-insured thrift to go under in the current market because of mortgage issues.

NetBank is also the largest federally-insured bank to go under since the Savings and Loan Crisis cost the nation as much as $500 billion beginning decades ago.

The event raises red flags for consumers of the now-bankrupt institution, many of them mortgage holders. That's because former NetBank customers are likely to be bombarded with misleading spam and phishing -- fraudulent emailed attempts to gain sensitive, private information by masquerading as a legitimate company.

The bank's failure is also a lesson for consumers who plop down more than $100,000 in even a federally-insured bank. Recovering all amounts over $100,000 could be arduous. For that reason, financial planners and advisers frown upon depositing more than the $100,000 insured level in any single bank.

As for the phishing likely to follow, NetBank customers aren't the only ones who could be threatened with identity theft. Phishing operations don't discriminate.

Federal regulators and banks that acquired NetBank assets say they will not email former NetBank customers asking them to validate deposits or otherwise request personal, confidential information, such as account numbers, Social Security Number, driver's license number, and the like.

Regulators and banking officials advise all consumers not respond to such email and to consider it fraudulent. Forward such email, with the full header attached to, spam@uce.gov.

• The FDIC has a toll-free number for customers affected by the failure: 1-888-256-6932.

• Also online locations where customers can get the straight scoop are ING Bank and the FDIC.

© 2007 DeadlineNews.Com

Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews.Com, a real estate news and consulting service, and the new Deadline Newsroom, DeadlineNews.Com's new backshop. In both cases, it's where all the news really hits home.

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