Federal Agents Raid Colonial Warehouse Unit

Colonial BancGroup Inc., Montgomery, Ala., has confirmed that federal agents affiliated with the special inspector general for the Trouble Asset Relief Program executed a search warrant at the company's mortgage warehouse lending division in Orlando on Monday. The company's statement said it was cooperating with the investigation and is conducting business as usual. There are press reports that federal agents also executed a search warrant on Colonial's former merger partner, Taylor, Whitaker and Bean, a mortgage wholesaler based in Orlando. A call to TBW was not returned by deadline. The raid on Monday (Aug. 3) came on the same day Colonial disclosed that a $300 million investment in the bank by TBW would not take place. The deal was believed to be necessary for Colonial to receive a $550 million capital infuson in TARP funds.