They can't foreclose on a borrower making timely payments even if the value declines !
Go ahead call me a liar but you are stupid. The bank in question was well documented at the time. The FDIC took over this bank which was making loans in NW Arkansas plus St. George, UT and Jackson Hole. The bankers were flying to Jackson Hole to make big loans to builders. But when the FDIC cracked down EVERY LOAN was called in. Now for secondary market, those loans were in someone else's hands. They had nothing to do with them.
Every builder in NWA regardless their payments had their loans called in. I knew one that scrambled around in a panic trying to refi and ended up having to scuttle several building projects as well as pay higher interest rates. If I recall correctly, they gave him 90 days to refi.
The closure of ANB had a collateral impact. A poultry company owner with a small bank in Decatur Arkansas was over-capitalized because his son in law had used some 70 million of "the old mans" money as collateral while the DSB held the shares of ANB as reserves. When the bank got taken over, it wiped out the 70 million. Suddenly it was the worst capitalized bank in the state. It borrowed funds from Chambers Bank ($20million or so) and the FDIC forced the bank to take 4 FDIC appointed overseers and to fire several loan officers. One was banned from banking for life and fined $5000 for not practising "safe and sound" banking. I saw that letter but didn't see anyone else except the President who was dying of a rare auto-immune disease was banned but not prosecuted.
This was when they hired me and another appraiser to take all their evaluations and properties and revalue them with appraisals. Once they got the report, if the loan amount exceeded the value, they called in the note, or at least the difference between what was owed and the value. Of course, many farms lost tens of thousand that the owners could not raise nor could they refinance. This was ordered by the new FDIC appointed trustees. It was wild. One farm I appraised the day a cleaner was there, I was escorted in by an armed employee as the father of the borrower had threatened to shoot the lawyer and 2 deputies who accompanied him. While inspecting the farm, the escort said that a skid-steer that they had inspected the day before had been removed during the night. The following day the house was burned, arson. One lady told me that she cashed in her 401k to make the downpayment on a small farm. She was in her 50s. Another left the house spic and span. But they had bought not only the property below for $475 but had been talked into taking overr a REPO farm for the note- it was not a good deal. And it sold so cheap it wasn't even funny. There were assignments I dreaded knowing the outcome.
Much of these properties were sold for 10 cents or less on the dollar. In the middle of it all, the poultry /bank owner died and was over 90. His 7,000 acres of land in 2 states was sold by the IRS and his family went from one of the wealthiest in the area to owning almost nothing. Simmons Foods bought part of the farm and the poultry processing plant and hatchery. Then they closed the plant and built a new larger plant on the edge of town and also took over the feed mill and propane gas company owned by Peterson. Meanwhile Decatur was calling in loans, including my own line of credit for the farm which was only a few thousand dollars. Which I did, even though I had more money in the bank than the LOC. Once the FDIC was satisfied, they let Chambers run the operation and they sold the bank to some Walmart execs and renamed it Grand Savings Bank. Peterson also owned Grand Savings Bank in Delaware county, OK but as a separate firm and it was not taken over like DSB, rather was sold to the Walmart folks to get cash to pay the IRS. It still runs as GSB in both OK and AR. They no longer use appraisers, only evaluators except by request or on large loans and there is a firm that not only are acting as an AMC but were ex-bank examiners and provide an auditing service pre-inspection.
https://www.FDIC.gov/resources/resolutions/bank-failures/failed-bank-list/anb.html
Historical Carrying Amount of Assets Covered by FDIC Loss- Share Agreements information of Decatur State Bank at 372 Sh 59 N, Decatur, AR, 72722.
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