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Politically Connected Zombie Bank Refuses to Stay in Grave

Crains 26 January 2016 No Comment

Seaway Bank & Trust, Chicago’s largest black-owned bank, sued Urban Partnership Bank last week in Cook County Circuit Court, alleging bad-faith dealings over the mortgage portfolio, originally held by failed South Side community lender ShoreBank. The loans have a face value of $154 million and were held on UPB’s books at $82 million as of Sept. 30.

UPB, formed in 2010 to succeed ShoreBank after its high-profile failure, assumed more than $1 billion in loans and has endured tens of millions in losses on that portfolio ever since. Since then, it’s shrunk to $672 million in assets.

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UPB moved late last year to sell more than 1,500 mortgages originated by ShoreBank in an effort to free itself of ShoreBank’s legacy and focus on new lending to South and West Side businesses.

Surprisingly, Seaway, which has endured recent troubles of its own and is searching for a new CEO, bid for the mortgages and came in with the highest offer, according to its complaint.

Some background on ShoreBank, featuring Jan Schakowsky, Tony Rezko, Goldman Sachs, Bill Brandt

Read more in Crain’s Chicago Business

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