It took 25 years for BankUnited Financial Corp. to blossom into Florida's largest homegrown financial institution.

But it took just one type of loan to sink its Coral Gables-based bank and trigger its May seizure by federal regulators: The payment option adjustable rate mortgage, or option ARM.

A look at how things went bad at the thrift -- now revitalized with fresh capital and under new ownership -- offers a window into the real estate and banking debacle that has punished Florida's economy. But it is also a personal tale of greed and control.

Alfred R. Camner, the founder and biggest shareholder as well the chairman and chief executive until October 2008, led the bank in an ambitious foray into option ARMs -- a product many consider the riskiest mortgage ever created.

''The big question is why would Camner bet the bank on one product that turned out to be the most toxic,'' says Ken Thomas, an independent Miami banking analyst.

That is just one of many questions about Camner's tenure at the bank, a publicly traded company that he ran much like a family business, hiring family members and steering work to his law firm for years.

Camner -- who still controls 45 percent of stock through special class B shares with super-voting rights -- declined to comment for this article, citing pending litigation.

Camner's troubles came to a head on May 21 when federal regulators swept into parent company BankUnited Financial Corp.'s headquarters and seized its busted bank. Simultaneously, the Federal Deposit Insurance Corp. sold the bank to a group of private equity firms led by New York banker John Kanas, that revived the bank with fresh capital.

The FDIC, which will shoulder the bulk of any loan losses, puts the cost to its insurance fund at $4.9 billion. That's the largest bank failure this year and the second most costly flop of a financial institution in the current downturn. BankUnited shareholders are likely wiped out.

How could things go so wrong?

Camner, a lawyer by training, started BankUnited in 1984 on Florida's west coast. It paid good rates on deposits and bought home mortgages made by others.

Over time, as premier Florida institutions such as Barnett Banks were gobbled up by out-of-state giants, BankUnited became, somewhat by default, the biggest bank based in Florida. Going toe to toe with behemoths like Bank of America and Wachovia, Camner cast about for the right niche.

In 2002, he tapped Ramiro A. Ortiz, a respected banker who was president of SunTrust's Miami operations, as president to build BankUnited's commercial and small-business lending.

But as Florida's housing boom took off in 2004, BankUnited soon found a different forte -- in option ARMs. Camner saw the success Marion and Herbert Sandler had in pioneering option ARMs as a highly profitable product that fueled growth at Golden West Financial in California.

Option ARMs, now discredited, give borrowers choices each month: Make a full payment of principal and interest, something in between, or a minimum payment that results in negative amortization, meaning the loan balance actually grows each month instead of shrinking.

It was just the sort of easy credit that speculators flocked to, fueling the rise in home prices between 2003 and 2006. Borrowers figured on making minimal installments for a little while and reselling a home at a quick profit or refinancing to avoid onerous terms that kicked in later.

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