A few quotes from today’s Seattle Times article:
“It’s always emphasized growth over all other aspects of its business.”
“they had to reach down to a new level of the marketplace. They had to seek out a lower quality of customer than they were used to dealing with.”
“Even though there was weakness in the market, they put their foot on the accelerator, because they were losing business to Countrywide and other lenders.”
I was impressed with the Sunday article about Washington Mutual by Rami Grunbaum, wherein a former WaMu executive, and insider, revealed his thoughts about the company’s current problems. It was interesting to read what I and many of my colleagues have suspected for some time. But today’s article by Drew DeSilver blows the doors wide open. Can you imagine anything more audaciously arrogant, from a banking perspective, then counting the growing principal on negative amortization loans as PROFIT?!? Let me explain: rather than viewing the unpaid interest on neg am loan when borrowers chose to make just the minimum payment, not enough to cover the principal and interest on a 30 year amortization schedule, WaMu literally counted the money that was not received as profit! How weird is that! From a Bank!
This is all very sad for a venerable local institution. Maybe you are old enough to remember the ads that touted Washington Mutual as, “The friend of the family”. This is sort like finding out that the friend of the family is an addicted gambler.
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