Girl In the OC_IHB
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<p><a href="http://biz.yahoo.com/e/080305/fmt8-k.html">http://biz.yahoo.com/e/080305/fmt8-k.html</a></p>
<p> </p>
<p> </p>
Anyone have any money at Fremont Bank?
- Thread starter Girl In the OC_IHB
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Girl In the OC_IHB
New member
<strong>Form 8-K for FREMONT GENERAL CORP </strong><hr noshade="noshade" size="1" />
<p><strong>5-Mar-2008</strong> </p>
<p><strong><big>Triggering Events That Accelerate or Increase a Direct Financial Obligation</big></strong> </p>
<p> </p>
<strong>Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial </strong>
Obligation or an Obligation under an Off-Balance Sheet Arrangement.
(b) On March 4, 2008, Fremont General Corporation ("Fremont General" or the "Company") doing business primarily through its wholly-owned bank subsidiary, Fremont Investment & Loan ("FIL" or the "Bank"), announced in a press release attached as Exhibit 99.1 hereto and incorporated herein by reference, that it received notices from two affiliated third party purchasers of an aggregate of $3.15 billion of residential sub-prime mortgage loans that the Bank had sold in March 2007, alleging that the Company was in default with respect to at least one of several obligations that the Company had undertaken in connection with such loan sales (the "Notices"). In March 2007, the Bank entered into two agreements (the "Loan Sale Agreements") with respect to the sale of residential sub-prime mortgage loans and related servicing to two affiliated third party purchasers as reported in the Company's press release which was reported in the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on March 21, 2007. To support the Bank's obligation to repurchase any loans that were sold in the transaction, which might subsequently breach any of the specific representations and warranties made in connection with the Loan Sale Agreements, Fremont General provided each of the purchasers with a guaranty to honor any of the Bank's obligations under such Loan Sale Agreements. In support of such guaranties, Fremont General covenanted that for two years following the effective date of such loan sale transactions (and for three years, if in connection with a sale, liquidation and certain other types of transactions involving the Company), it would not permit the Company's "tangible net worth," as defined in the guaranties, at any time to be less than $250 million. To the extent that Fremont General fails to comply with such covenant, it agreed to either provide a letter of credit acceptable to the purchasers in an amount equal to the tangible net worth deficiency (i.e., the difference between $250 million and Fremont General's then tangible net worth on an ongoing basis), or deposit into a reserve account from sources that would not otherwise further diminish the Company's tangible net worth an amount that would be equal to such tangible net worth deficiency. Fremont General further agreed to deliver, on a quarterly basis after the effective date of the loan sale transactions, specified financial statements on both a consolidated basis and also of the Bank, along with a certification of the Company's chief financial officer, both with respect to such financial statements and as to compliance with the referenced tangible net worth covenant. Fremont General has determined that the financial statement delivery obligations and related certifications for the quarters ended June 30, September 30 and December 31, 2007 were not delivered by Fremont General as required by the guaranties. Moreover, as previously disclosed in connection with ongoing reviews and the Company's preparation of its 2007 consolidated financial statements, which have not yet been completed, Fremont General and the Bank may need to record additional asset write-downs and reserves, which could result in further losses or, alternatively, will require the Bank to adjust downward its regulatory capital. Consequently, the Company's new management is not yet able to make delivery of its December 2007 financial statements and the related certifications required by the guaranties. The Notices require Fremont General to provide the purchasers either with assurances that Fremont General meets the referenced tangible net worth covenant or to take the actions called for by the guaranties as discussed above. <strong><u>At this time, the Company's new management cannot confirm that Fremont General is able to satisfy the tangible net worth covenant as of December 31, 2007 due to its ongoing efforts to complete its 2007 consolidated financial statements, but believes it is likely that Fremont General will not be in compliance with such covenant at December 31, 2007 and, therefore, would be in default under the guaranties, as a result of the losses incurred during 2007 coupled with the possible additional write-downs and reserves that it may be required to establish. Under such circumstances, and given the Company's limited available liquidity and overall financial condition, </u></strong>
<p> </p>
<hr width="75%" color="#999999" noshade="noshade" size="2" />
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<p>Fremont General is not in a position to either provide a letter of credit or deposit cash into a reserve account. Although the Company's new management has initiated discussions with the purchasers to seek a waiver of this guaranty requirement, no assurances can be made as to whether such discussions will be successful or that the purchasers will not file a lawsuit against the Company or declare an event of default. To the extent that litigation is pursued and the Company was not successful in defending any such lawsuit, its ability to continue to conduct business as a going concern would be called into question.
The Notices do not allege that the Bank is in breach of its obligations under the Loan Sale Agreements, but rather that Fremont General has failed to deliver the required financial statements and related certifications required under the guaranties.
Item 9.01 Financial Statements and Exhibits. </p>
<center>
<pre>(d) Exhibits.
Exhibit
Number Description
Exhibit 99.1 Press Release issued by the Company, dated March 4, 2008
</pre>
</center>
<p><strong>5-Mar-2008</strong> </p>
<p><strong><big>Triggering Events That Accelerate or Increase a Direct Financial Obligation</big></strong> </p>
<p> </p>
<strong>Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial </strong>
Obligation or an Obligation under an Off-Balance Sheet Arrangement.
(b) On March 4, 2008, Fremont General Corporation ("Fremont General" or the "Company") doing business primarily through its wholly-owned bank subsidiary, Fremont Investment & Loan ("FIL" or the "Bank"), announced in a press release attached as Exhibit 99.1 hereto and incorporated herein by reference, that it received notices from two affiliated third party purchasers of an aggregate of $3.15 billion of residential sub-prime mortgage loans that the Bank had sold in March 2007, alleging that the Company was in default with respect to at least one of several obligations that the Company had undertaken in connection with such loan sales (the "Notices"). In March 2007, the Bank entered into two agreements (the "Loan Sale Agreements") with respect to the sale of residential sub-prime mortgage loans and related servicing to two affiliated third party purchasers as reported in the Company's press release which was reported in the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on March 21, 2007. To support the Bank's obligation to repurchase any loans that were sold in the transaction, which might subsequently breach any of the specific representations and warranties made in connection with the Loan Sale Agreements, Fremont General provided each of the purchasers with a guaranty to honor any of the Bank's obligations under such Loan Sale Agreements. In support of such guaranties, Fremont General covenanted that for two years following the effective date of such loan sale transactions (and for three years, if in connection with a sale, liquidation and certain other types of transactions involving the Company), it would not permit the Company's "tangible net worth," as defined in the guaranties, at any time to be less than $250 million. To the extent that Fremont General fails to comply with such covenant, it agreed to either provide a letter of credit acceptable to the purchasers in an amount equal to the tangible net worth deficiency (i.e., the difference between $250 million and Fremont General's then tangible net worth on an ongoing basis), or deposit into a reserve account from sources that would not otherwise further diminish the Company's tangible net worth an amount that would be equal to such tangible net worth deficiency. Fremont General further agreed to deliver, on a quarterly basis after the effective date of the loan sale transactions, specified financial statements on both a consolidated basis and also of the Bank, along with a certification of the Company's chief financial officer, both with respect to such financial statements and as to compliance with the referenced tangible net worth covenant. Fremont General has determined that the financial statement delivery obligations and related certifications for the quarters ended June 30, September 30 and December 31, 2007 were not delivered by Fremont General as required by the guaranties. Moreover, as previously disclosed in connection with ongoing reviews and the Company's preparation of its 2007 consolidated financial statements, which have not yet been completed, Fremont General and the Bank may need to record additional asset write-downs and reserves, which could result in further losses or, alternatively, will require the Bank to adjust downward its regulatory capital. Consequently, the Company's new management is not yet able to make delivery of its December 2007 financial statements and the related certifications required by the guaranties. The Notices require Fremont General to provide the purchasers either with assurances that Fremont General meets the referenced tangible net worth covenant or to take the actions called for by the guaranties as discussed above. <strong><u>At this time, the Company's new management cannot confirm that Fremont General is able to satisfy the tangible net worth covenant as of December 31, 2007 due to its ongoing efforts to complete its 2007 consolidated financial statements, but believes it is likely that Fremont General will not be in compliance with such covenant at December 31, 2007 and, therefore, would be in default under the guaranties, as a result of the losses incurred during 2007 coupled with the possible additional write-downs and reserves that it may be required to establish. Under such circumstances, and given the Company's limited available liquidity and overall financial condition, </u></strong>
<p> </p>
<hr width="75%" color="#999999" noshade="noshade" size="2" />
<!--
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-->
<p>Fremont General is not in a position to either provide a letter of credit or deposit cash into a reserve account. Although the Company's new management has initiated discussions with the purchasers to seek a waiver of this guaranty requirement, no assurances can be made as to whether such discussions will be successful or that the purchasers will not file a lawsuit against the Company or declare an event of default. To the extent that litigation is pursued and the Company was not successful in defending any such lawsuit, its ability to continue to conduct business as a going concern would be called into question.
The Notices do not allege that the Bank is in breach of its obligations under the Loan Sale Agreements, but rather that Fremont General has failed to deliver the required financial statements and related certifications required under the guaranties.
Item 9.01 Financial Statements and Exhibits. </p>
<center>
<pre>(d) Exhibits.
Exhibit
Number Description
Exhibit 99.1 Press Release issued by the Company, dated March 4, 2008
</pre>
</center>
Girl In the OC_IHB
New member
http://www.latimes.com/business/la-fi-fremont5mar05,0,5792517.story
Fremont's loan buyers declare it in default
Tim Rue / Bloomberg News
Fremont shares plunged to less than 50 cents a share today, slashing the company's market value less than $40 million.
The Brea-based bank says the action comes as its market value slips to less than $40 million. A successful lawsuit could shut it down altogether.
By E. Scott Reckard, Los Angeles Times Staff Writer
March 5, 2008
Fremont General Corp., a Brea banking company that regulators forced out of the sub-prime mortgage business last year, said Tuesday that two purchasers of its loans had declared it to be in default, raising the possibility that they could put it out of business.
Shares in the battered parent of Fremont Investment & Loan fell 24 cents, to 46 cents. The stock has fallen 96% from its 52-week high of $13.80.
Fremont said it couldn't demonstrate it still had a net worth of $250 million, as it promised to do when it sold $3.15 billion in loans last March to the two buyers, which it didn't identify.
The company, until recently based in Santa Monica, has delayed filing its 2007 financial statements, saying it is trying to quantify its mounting losses and determine how much in reserves it must set aside.
Fremont reported a $202-million loss for 2006 and an additional $837-million loss through the first nine months of 2007. Last week, it said it might have to write down its assets more than it had already done, adding to those losses.
The company also said it was running short of cash to pay its debts and was considering putting itself up for sale. As of last week, the parent company had just $21 million in cash available and was deferring payments on some of its bonds.
The Federal Deposit Insurance Corp., which regulates Fremont Investment & Loan, declared the unit to be operating unsafely last year. The FDIC forced it to stop making highly risky home loans, many of them involving 100% financing for people who didn't document their incomes.
Such loans and others marketed to borrowers with high risk factors have caused foreclosures to rise across the country to the highest levels since the Great Depression. Some analysts predict the debacle will cause $400 billion in losses at financial institutions.
Fremont Investment had $7.6 billion in assets at the end of 2007, down from $12.7 billion a year earlier. Its deposits totaled $7.1 billion at the end of last year, down from $10.1 billion at the end of 2006.
The FDIC insures deposits at Fremont's 22 branches for up to $100,000 per depositor. Retirement accounts are insured separately for up to $250,000.
<a href="mailto:scott.reckard@latimes.com">scott.reckard@latimes.com</a>
Fremont's loan buyers declare it in default
Tim Rue / Bloomberg News
Fremont shares plunged to less than 50 cents a share today, slashing the company's market value less than $40 million.
The Brea-based bank says the action comes as its market value slips to less than $40 million. A successful lawsuit could shut it down altogether.
By E. Scott Reckard, Los Angeles Times Staff Writer
March 5, 2008
Fremont General Corp., a Brea banking company that regulators forced out of the sub-prime mortgage business last year, said Tuesday that two purchasers of its loans had declared it to be in default, raising the possibility that they could put it out of business.
Shares in the battered parent of Fremont Investment & Loan fell 24 cents, to 46 cents. The stock has fallen 96% from its 52-week high of $13.80.
Fremont said it couldn't demonstrate it still had a net worth of $250 million, as it promised to do when it sold $3.15 billion in loans last March to the two buyers, which it didn't identify.
The company, until recently based in Santa Monica, has delayed filing its 2007 financial statements, saying it is trying to quantify its mounting losses and determine how much in reserves it must set aside.
Fremont reported a $202-million loss for 2006 and an additional $837-million loss through the first nine months of 2007. Last week, it said it might have to write down its assets more than it had already done, adding to those losses.
The company also said it was running short of cash to pay its debts and was considering putting itself up for sale. As of last week, the parent company had just $21 million in cash available and was deferring payments on some of its bonds.
The Federal Deposit Insurance Corp., which regulates Fremont Investment & Loan, declared the unit to be operating unsafely last year. The FDIC forced it to stop making highly risky home loans, many of them involving 100% financing for people who didn't document their incomes.
Such loans and others marketed to borrowers with high risk factors have caused foreclosures to rise across the country to the highest levels since the Great Depression. Some analysts predict the debacle will cause $400 billion in losses at financial institutions.
Fremont Investment had $7.6 billion in assets at the end of 2007, down from $12.7 billion a year earlier. Its deposits totaled $7.1 billion at the end of last year, down from $10.1 billion at the end of 2006.
The FDIC insures deposits at Fremont's 22 branches for up to $100,000 per depositor. Retirement accounts are insured separately for up to $250,000.
<a href="mailto:scott.reckard@latimes.com">scott.reckard@latimes.com</a>
halfnote19_IHB
New member
<p>I had a friend who had tons of money in CDs at fremont bank. She tried to get me to put some of my money there, but I decided against it. Glad I did.</p>
IrvineRenter_IHB
New member
There will be others...