Washington Mutual offers discounted rates to past subprime customers

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Washington Mutual announced that it will be providing up to $2 billion in subprime relief through the availability of lower interest-rate products. These products will be available to current Washington Mutual subprime customers who are facing increased payments when their loan adjusts.

Seattle-based WaMu, as the thrift calls itself, said borrowers who are current on existing WaMu subprime loans and anticipate payment increases are eligible to apply for discounted fixed-rate loans and other mortgage products.

WaMu’s subprime arm, Long Beach Mortgage is notorious in the industry for doing some of the "dirtiest" deals on the subprime market. They are some of the most aggressive lenders on high LTV, low FICO score loans out there for a broker to use. "Last stop, Long Beach" is still a common refrain for subprime loans that other banks aren’t interested in. It will be interesting to see if other banks offer similar mortgage products and what the overall impact will be. $2 billion sounds like a healthy number, but how many loans did Long Beach originate over the last few years? According to their 10-K filing approximately $59 billion. That $2 billion represents about 3.4% of all subprime loans that they originated. More here.

I guess "get in line fast"?

UPDATE: From Bloomberg: "Washington Mutual, the biggest U.S. savings and loan, will refinance some adjustable- rate subprime mortgages into 30-year, fixed-rate loans that charge half a percentage point of interest less than normal."