Nov 25, 2007

Washington Mutual

Part of a series The Great American Write-Down

Washington Mutual (WM.N) will increase their loan loss provisions by at least $2.7 billion this year. The companies stock has also taken an additional hit from an investigation by NY AG Cuomo into the practice of pressuring their mortgage insurers to inflate the value of the properties being mortgaged. As a result of this practice, families were over mortgaging their homes causing a severe financial burden. As these loans were packaged and sold, there actual underlying value was also inflated; causing a misrepresentation and losses to the investment banks that bought them.

Note: Company just stated that further provisions, estimated at $1 billion or more, are going to be required to cover additional loan losses.

WaMu Sinks as Losses Mount
Washington Mutual shares sink on Cuomo probe, losses
WaMu sued over home appraisals - law firm
WaMu’s “Amazing Accomplishment”