Actually Lewie Ranieri isn’t dead. But the bank he formed when he left Salomon Brothers, Franklin Bank Corp, is:
Franklin Bank, S.S.B., Houston, Texas, was closed today by the Texas Department of Savings and Mortgage Lending, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Prosperity Bank, El Campo, Texas, to assume all of the deposits, including those that exceeded the insurance limit, of Franklin Bank.
As of September 30, 2008, Franklin Bank had total assets of $5.1 billion and total deposits of $3.7 billion. Prosperity Bank agreed to assume all the deposits, including the brokered deposits, for a premium of 1.7 percent. In addition to assuming all of the failed bank’s deposits, Prosperity Bank will purchase approximately $850 million of assets. The FDIC will retain the remaining assets for later disposition.
Ranieri was the man behind the first ever mortgage securitisation - in 1977.
He was more than just the progenitor of MBS though. Ranieri created not just one series of bonds but the entire MBS market. The Salomon team he headed (”the fat guys”) lobbied around the country; they had laws changed everywhere to recognise MBS as legal investments; they sold securitisation to the great bond houses of the USA.
Ranieri also said that “mortgages are math” - a dictum that has taken thirty years to come full circle.
The FDIC’s bank failure list in full is available here.
Related links
Map of FDIC seized banks - Infectious Greed
