Home Savings of America depositors will get checks in the mail from the FDIC.
Federal bank regulators on Friday closed Home Savings of America, a lender in Little Falls, Minn., with more than 50 mortgage origination offices from coast to coast.
Regulators weren't able to find a buyer for the thrift, so the Federal Deposit Insurance Corp. is assuming Home Savings of America's $434.1 million in assets and $432.2 million in deposits.
The FDIC, which insures deposits up to $250,000, will be mailing checks to depositors for the amount of their insured money.
Such payouts are relatively unusual. The last time the FDIC did one was more than a year ago, said FDIC spokesman Greg Hernandez.
Hernandez said Home Savings of America's structure, with its far-flung offices, made it tough to market.
On its website, Home Savings said it originated more than $3.5 billion in mortgages last year.
The bank's mortgage department will continue to operate "for an undetermined period to wind down its business affairs," the FDIC said on its website. Borrowers should continue to make their payments.
The mortgage loans will be pooled and sold, as the FDIC does with loans from other failed banks.
The Office of the Comptroller of the Currency, the bank's main regulator, said it acted because Home Savings of America "had experienced substantial dissipation of assets and earnings due to unsafe or unsound practices."
It was critically undercapitalized with no reasonable prospects, it said. Regulators had been cracking down on the lender since 2010.
It's the second bank failure in Minnesota this year. Last month, regulators closed Forest Lake-based Patriot Bank, which was bought by First Resource Bank in Savage.
The FDIC said customers with more than $250,000 in deposits at Home Savings should call the FDIC at 800-523-8089.
Jennifer Bjorhus • 612-673-4683