Printer Friendly

OTS SEEKS $8.6 MILLION, PROHIBITION OF FORMER ILLINOIS THRIFT CHAIRMAN

 OTS SEEKS $8.6 MILLION, PROHIBITION
 OF FORMER ILLINOIS THRIFT CHAIRMAN
 WASHINGTON, Aug. 28 /PRNewswire/ -- The Office of Thrift Supervision (OTS) today announced it has taken enforcement action against the former chairman and controlling shareholder of a failed Illinois thrift to recover $8.6 million in restitution and to ban him from the banking industry.
 OTS also issued an asset preservation order against the former executive, Roland B. Bonar, to prevent dissipation of his assets. Bonar headed and was 98 percent owner of failed First Savings of American of Orland Park, Ill.
 The case against Bonar was developed jointly by the Department of Justice Civil Division and OTS under a joint agreement covering the investigation and litigation of enforcement actions.
 OTS accused Bonar of reckless violation of regulations that caused the multi-million loss to the thrift. The institution failed in December 1986 and was liquidated in March 1989 at a cost of $25 million.
 Bonar knowingly voted approval of several loans secured by real estate even though the appraisals of property used as collateral were deficient in one of several ways, OTS said. He took these actions despite receiving an examination report that outlined pervasive appraisal deficiencies by the thrift, and promising to ensure that future appraisals complied with requirements.
 The largest of the losses incurred by the thrift was on a 1985 loan to fund acquisition and development of a residential subdivision on 20 acres in Colorado Springs, Colo. Bonar voted to approve this loan without adequate appraisal of the land used as collateral.
 The borrowers subsequently defaulted and First Savings acquired the collateral in July 1988. The loan had an unpaid principal balance of $2.9 million and accrued interest of $844,000. The land was sold and only $329,000 recovered, leaving the thrift with a loss of $3.3 million.
 Bonar and his board also approved a $875,000 line of credit to a Colorado corporation, MRG-1 in September 1985, accepting a third lien mortgage on a 1,760-acre ranch in El Paso County, Colo., and accompanying water rights. OTS alleged that the appraisal had numerous deficiencies Bonar knew to be violations of regulations. In June 1987, priority lien holders foreclosed on the collateral land, and First Savings was unable to obtain any recovery on its third lien and lost $1.1 million.
 The thrift lost another $1.6 million in an ill-fated plan to develop a recreational vehicle park in Grand Junction, Colo. Initially, First Savings granted a $900,000 loan in August 1982 that was collateralized by a second lien on an office building in Grand Junction. In August 1985, First Savings exchanged this collateral for 39 acres of vacant land in Grand Junction, while a First Savings subsidiary granted a new loan for $700,000 also collateralized by the same 39 acres. The borrowers intended to develop this plot along with another adjoining 38-acre plot into an 840-site recreational vehicle park known as Neighbors R.V. Park, or Grand Junction Tech Center.
 Neither the thrift nor its subsidiary had an adequate appraisal of the collateral land and the only available appraisal was prepared after the loans had been approved, among other faults, OTS said. The recreational vehicle park was never developed, and the borrowers defaulted on both loans.
 In addition to seeking restitution for losses incurred by these and other loans made without adequate appraisals, OTS seeks reimbursement for its costs in the proceeding and the underlying investigation. Bonar has 20 days to reply to the charges. The hearing will be held in or near Chicago at a date to be determined.
 -0- 8/28/92
 /CONTACT: Thomas P. Mason of the Office of Thrift Supervision, 202-906-6677/ CO: Office of Thrift Supervision ST: District of Columbia, Illinois, Colorado IN: FIN SU:


TW -- DC024 -- 4558 08/28/92 16:21 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Aug 28, 1992
Words:637
Previous Article:RESIDENTIAL FUNDING MORTGAGE CERTIFICATES 1992-S27 RATED 'AAA' BY FITCH -- FITCH FINANCIAL WIRE --
Next Article:THE VANGUARD GROUP OF INVESTMENT COMPANIES DONATES PLANNED ADVERTISING EXPENDITURE TO FLORIDA HURRICANE RELIEF EFFORTS
Topics:


Related Articles
VIOLATION OF OTS ORDER SENDS PARKER TO JAIL
TCF BANK FIRST TO RECEIVE INTERSTATE BRANCH APPROVAL
OTS SEEKS REMOVAL, RESTITUTION FROM AVONDALE FEDERAL SAVINGS PRESIDENT
CALIFORNIA'S FIRST NEWPORT BANK IN RECEIVERSHIP; DEPOSITS INSURED
BOBERSKI BARRED UNDER CONSENT ORDER; TO PAY $525,000 RESTITUTION, PENALTY
CITADEL FEDERAL, S.C., TAKEN OVER BY GOVERNMENT
FORMER S&L OFFICIALS AND LAW FIRM SETTLE OTS ACTION; TO PAY $11.2 MILLION
GOVERNMENT TAKES CONTROL OF PIEDMONT FEDERAL SAVINGS
POUGHKEEPSIE SAVINGS BANK ANNOUNCES THAT A REVISED CAPITAL PLAN WILL BE SUBMITTED TO THE OFFICE OF THRIFT SUPERVISION
OTS SEEKS $230,000 AND PROHIBITION OF FORMER GEORGIA THRIFT EXECUTIVE

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters