Lead Investor in Colonial Unsure if Deal Will Happen

Lee Farkas, chairman and founder of Taylor, Bean & Whitaker — the lead investor in the recapitalization of Colonial BancGroup of Alabama — said he doesn't know if the deal is going to happen. In a brief interview with National Mortgage News, Mr. Farkas said he is not heard anything about the status of the investment lately. Asked whether he thought the recap of Colonial would happen, he said, "I don't know." He declined to comment further. Colonial is the nation's largest warehouse lender to non-depository mortgage banking firms. TBW is slated to invest $100 million in Colonial and has lined up additional commitments of $200 million. With that money committed, Colonial has applied for $550 million in Troubled Asset Relief Program funds to stabilize its capital position. In a new research note, Sandler O'Neill said there has been a "deafening silence" from banking regulators regarding the recap plan. (For the full story see the print edition of NMN.)