Pulse Bancorp uncovers $9 M portfolio tied to fraudulent applications.

SOUTH RIVER, N.J. -- Pulse Bancorp said it discovered a portfolio of about $9 million of bridge loans on residential real estate that had been based on falsified mortgage applications.

The loans were made by its Pulse Savings Bank unit.

In a release, the company said a preliminary investigation suggested that borrowers and properties securing the loans are nonexistent.

Pulse said it is "aggressively seeking criminal and civil action against the party who allegedly committed the fraud." The company said insurance settlements and any amounts recovered from responsible parties may offset part of the losses.

The amount of the loss is undetermined. The company said that assuming a total loss, the bank still will "significantly exceed all minimum regulatory capital requirements."

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