After lending more than 75 percent of its capital to Lembi Group — and after all but one of those loans defaulted — the local Tamalpais Bank is now minus $38 million. The bank has a cease and desist from the FDIC telling them they need to seriously shape up. Seriously, how did this happen? Well, Lembi's money pipes from commercial mortgage-backed securities had already dried up, but local banks like Tamalpais took the opportunity between December 2007 and April 2008 to swoop in. Maybe not the best thing to swoop in on, alas. [San Francisco, previously]
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