Multiple Lenders Face Penalties from HUD

US Bank, NA, located in Minnesota, is a supervised federal savings bank and a Ginnie Mae issuer. According to HUD, US Bank violated HUD/FHA requirements in the submission of documentation necessary for the department to process a claim on a multifamily insured property. By failing to provide necessary documentation, HUD claims the bank delayed the resale of the foreclosed property and the department’s mitigation of the FHA fund’s losses in connection with the claim. US Bank has agreed to settle these allegations and has made an administrative payment of $37,500.

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Despite Closures Minnesota Banks Faring Well During Downturn

St. Paul, Minn. — The assets of Prosperan Bank in Oakdale were taken over by North Dakota-based Alerus Financial late last week, but customers were able to do business as usual Monday.

Minnesota is home to about 420 banks and since the start of the credit crunch, seven have failed. That might not sound like very many, but before this latest batch of failures, the last state bank failure we had was in the year 2000, nearly 10 years ago.

Kevin Murphy, Minnesota's deputy commerce commissioner, said economic conditions have taken their toll on the state's banks. Many have suffered losses tied to commercial real estate and residential development loans.

Murphy said most of the state's banks are weathering those stresses and are actually in pretty good shape, but about 1 out of 5 banks and credit unions are on a "watch list," due to rising loan losses.

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