Fremont on its last legs

Fremont General has been told by the Federal Deposit Insurance Corp. that its bank subsidiary is undercapitalized, and it’s been given 60 days to take “prompt corrective action.” That means more capital or a buyer, neither of which will be especially easy these days. Bea-based Fremont was at one time one of the nation's largest subprime lenders, though that seems like a long time ago. Earlier this month, the company itself warned that it might be forced out of business because of contracts tied to subprime mortgages. Fremont has lost more than 90 percent of its market value in the past year (stock is trading at 55 cents). From the WSJ:

Fremont had been a major subprime home lender until it agreed to a cease-and-desist order with the FDIC in early 2007. The agency cited weak risk management related to subprime lending and commercial real estate loans for the order. Soon thereafter, Fremont sold or entered negotiations to sell most of its subprime residential real-estate business and assets. Fremont has been lacking cash the past year as the FDIC order prevented it from getting dividends from Fremont Industrial & Loan. In November, Fremont underwent a management change after a group walked away from a proposal to invest in the company.