Standard Federal Savings Bank, a top mortgage loan servicer, was seized Wednesday by the of Office of Thrift Supervision.
The Gaithersburg, Md., thrift, with $1.9 billion in assets, was deemed unable to meet capital requirements. It also experienced a sharp decline in the value of purchased servicing rights.
Mortgage experts have said the current refinancing boom has hurt purchasers of such rights. They are booked as assets and must be written down when homeowners pay off loans.
Standard Federal aggressively broke into the top ranks of mortgage servicing in the late 1980s. As of June 30, it was No. 8, with a $31 billion portfolio.