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Profile: Aurora Bank

Aurora Bank is based in Wilmington, Del., with a single branch in Jersey City, N.J.

Aurora Bank is the former Lehman Brothers Bank.Savers like Aurora because it often offers above-average returns on certificates of deposit with terms ranging from 6 months to 5 years and a $1,000 minimum deposit.

Click here to see Aurora’s latest CD rates.

You can apply for accounts online from anywhere in the country and fund them with an electronic transfer or by check with a mail-in application.

Deposits up to $250,000 are insured by the Federal Deposit Insurance Corp.

Aurora has more than $4 billion in assets, placing it among the 200 largest banks in the country.

It now earns a solid four out of  five stars from Bankrate’s “Safe & Sound” system, which rates banks on such things as asset quality, profitability and liquidity.

But it is owned by Lehman Brothers, the bankrupt investment bank, and was known as Lehman Brothers Bank until 2009.

Its mortgage-servicing business, Aurora Loan Services, was a major supplier of the poorly verified “liar loans” that Lehman packaged and sold to investors, according to the Toronto Globe and Mail.

That business was hugely profitable until a shocking number of those loans began to default, leading to Lehman’s demise and the ensuing financial crisis.

Although Aurora is not part of the Lehman bankruptcy, its operation has been closely monitored by federal regulators since the investment bank’s collapse in September 2008.

Banking industry reports say it will probably be sold at some point to pay Lehman’s creditors.

Industry publications also cite court records that show Aurora Loan Services continues to manage almost half-a-million mortgages.

In April 2011, bank regulators ordered Aurora to reimburse homeowners who were improperly foreclosed upon and to hire independent auditors to determine how many foreclosures could and should have been avoided in 2009 and 2010.

Given all of that it’s no surprise that Aurora sports an “F” rating from the Better Business Bureau.

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