Comments on: WaMu’s troubles….. http://blownmortgage.com/2007/12/10/wamus-troubles/ #1 Free Home Loan Modification & Debt Relief Help For US Home Owners - Truths, Facts & News About the Mortgage Industry Sat, 07 Nov 2009 02:53:18 -0700 http://wordpress.org/?v=2.8.3 hourly 1 By: Freyde http://blownmortgage.com/2007/12/10/wamus-troubles/comment-page-1/#comment-10752 Freyde Fri, 11 Apr 2008 01:35:48 +0000 http://blownmortgage.com/2007/12/10/wamus-troubles/#comment-10752 Was management mediocre at Wamu, especially during the last four years? Absolutely. Did Wamu aggressively pursue sub-prime loans? This is totally ridiculous. About the appraisals; is even more ridiculous. I worked for Wamu for nine years, and I can tell there was no emphasis on selling sub-prime loans. Some emphasis on Option Arms. That I agree. About pushing appraisals, it just takes to go around Real Estate offices in the Southern California area, and ask Realtors, what they think about this, and what you?ll get out of it, is that many of these real estate professionals did not do business with Wamu because it was ?too conservative with appraisals?. In my personal opinion, politicians are just trying to find someone to blame for this huge mess we are in. What I saw while working for Wamu, gave me a very different prospective I want to share briefly. Wamu did not do a lot of sub-prime loans, but made a terrible mistake ?buying? them from many sources. Regarding wholesale, unfortunately, and not just for Wamu, the quality of the loans decrease big time when you work with brokers. I always questioned, why, ?all? major banks did not certain loans, but they accepted them through wholesale? I personally saw loans done through wholesale, I knew working directly with the bank, it would?ve been a mayor NO NO. Wamu never focused on 100% financing, but again, purchased many of these loans. Was that stupid? I agree ?100%?. Regarding Option Arms, they have been around for years, and it wasn?t until some companies stared doing 80/20 with option ARMs ?Stated Income?, when trouble started. I know hundreds of clients who have done a wonderful job managing these loans. Is it a loan good for everybody? Absolutely not. But it has been a wonderful tool for many who know how to manage their finances. There are many thing wrong in the lending industry. Just to name a few: Allowing add prepayment penalties to loans to increase agent?s commission. Rebates should be illegal. What ever fee is charged on a loan should be charged at front and never to exceed two points. Two points are already too much. Stated Income loans should be limited to borrowers with certain profiles and credit record and just for low loan-to-value situations. Interest only loans should never have an introductory period less than five years and first and consecutive adjustments should never exceed more than half percent annually. Life Caps for no reason should be above three percent. Sub-prime loans should be full documented only. Investment properties should require never less then 25% down payment. And?.I got tired. Wamu problems have to do a lot with really bad management. Was management mediocre at Wamu, especially during the last four years? Absolutely.
Did Wamu aggressively pursue sub-prime loans? This is totally ridiculous. About the appraisals; is even more ridiculous. I worked for Wamu for nine years, and I can tell there was no emphasis on selling sub-prime loans. Some emphasis on Option Arms. That I agree. About pushing appraisals, it just takes to go around Real Estate offices in the Southern California area, and ask Realtors, what they think about this, and what you?ll get out of it, is that many of these real estate professionals did not do business with Wamu because it was ?too conservative with appraisals?. In my personal opinion, politicians are just trying to find someone to blame for this huge mess we are in.
What I saw while working for Wamu, gave me a very different prospective I want to share briefly. Wamu did not do a lot of sub-prime loans, but made a terrible mistake ?buying? them from many sources. Regarding wholesale, unfortunately, and not just for Wamu, the quality of the loans decrease big time when you work with brokers. I always questioned, why, ?all? major banks did not certain loans, but they accepted them through wholesale? I personally saw loans done through wholesale, I knew working directly with the bank, it would?ve been a mayor NO NO. Wamu never focused on 100% financing, but again, purchased many of these loans. Was that stupid? I agree ?100%?. Regarding Option Arms, they have been around for years, and it wasn?t until some companies stared doing 80/20 with option ARMs ?Stated Income?, when trouble started. I know hundreds of clients who have done a wonderful job managing these loans. Is it a loan good for everybody? Absolutely not. But it has been a wonderful tool for many who know how to manage their finances.
There are many thing wrong in the lending industry. Just to name a few: Allowing add prepayment penalties to loans to increase agent?s commission. Rebates should be illegal. What ever fee is charged on a loan should be charged at front and never to exceed two points. Two points are already too much. Stated Income loans should be limited to borrowers with certain profiles and credit record and just for low loan-to-value situations. Interest only loans should never have an introductory period less than five years and first and consecutive adjustments should never exceed more than half percent annually. Life Caps for no reason should be above three percent. Sub-prime loans should be full documented only. Investment properties should require never less then 25% down payment. And?.I got tired. Wamu problems have to do a lot with really bad management.

]]> By: mike http://blownmortgage.com/2007/12/10/wamus-troubles/comment-page-1/#comment-7836 mike Tue, 11 Dec 2007 14:49:37 +0000 http://blownmortgage.com/2007/12/10/wamus-troubles/#comment-7836 Washington Mutual was a horribly run company. They bought up lender after lender a few years ago with too much emphasis put onto mortgage lending. I have a close friend who was an Wholesale Account Executive with one of their subprime companies. He had about 2 years of experience in the business and was making over $300,000 a year. They agressively pursued subprime and option arms. They are also being investigated by the New York Attorney General for strong arming an appraisal firm. By the way it was their RETAIL channel that ordered about 260,000 appraisals in just a few months from the firm that was threatened. I don't think this is any reflection on wholesale lending. I think it is a reflection on very poor management. I have had no less than 5 new wholesale reps from major regional banks enter my office recently and claim that their bank sees this as a great opportunity to enter the wholesale channel. The big players can exit it they wish. The regionals with better balance sheets and the same access the the federal home loan banks can serve our needs better and I don't have to compete with them on the street or on television. Washington Mutual was a horribly run company. They bought up lender after lender a few years ago with too much emphasis put onto mortgage lending.

I have a close friend who was an Wholesale Account Executive with one of their subprime companies. He had about 2 years of experience in the business and was making over $300,000 a year.

They agressively pursued subprime and option arms.

They are also being investigated by the New York Attorney General for strong arming an appraisal firm. By the way it was their RETAIL channel that ordered about 260,000 appraisals in just a few months from the firm that was threatened.

I don’t think this is any reflection on wholesale lending. I think it is a reflection on very poor management.

I have had no less than 5 new wholesale reps from major regional banks enter my office recently and claim that their bank sees this as a great opportunity to enter the wholesale channel. The big players can exit it they wish. The regionals with better balance sheets and the same access the the federal home loan banks can serve our needs better and I don’t have to compete with them on the street or on television.

]]> By: Morgan http://blownmortgage.com/2007/12/10/wamus-troubles/comment-page-1/#comment-7818 Morgan Tue, 11 Dec 2007 05:30:56 +0000 http://blownmortgage.com/2007/12/10/wamus-troubles/#comment-7818 Tom - great post! I was going to cover the same thing this evening. We've documented the tenuous position that WaMu has been in over the past year. The major red flags? 1. the majority of their non-cash profit coming in the form of deferred interest from pay-option arms. 2. the lowest cash reserve of any of the major banks. Those two are enough to end you up in chapter 11 or sold to a brave bidder. http://www.thestreet.com/s/is-wamu-the-next-countrywide/newsanalysis/ratings/10375529.html Tom – great post! I was going to cover the same thing this evening. We’ve documented the tenuous position that WaMu has been in over the past year. The major red flags?

1. the majority of their non-cash profit coming in the form of deferred interest from pay-option arms.

2. the lowest cash reserve of any of the major banks.

Those two are enough to end you up in chapter 11 or sold to a brave bidder.

http://www.thestreet.com/s/is-wamu-the-next-countrywide/newsanalysis/ratings/10375529.html

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