WaMu Execs Blame Regulators for Its Demise

CNBC ^ | 13 Apr 2010

[hiho hiho]

Former Washington Mutual Chief Executive Kerry Killinger on Tuesday said regulators unfairly seized the Seattle-based thrift in September 2008 and sold it to JPMorgan Chase for a bargain price of $1.9 billion.

In prepared testimony before the Senate Permanent Subcommittee on Investigations, Killinger said that, while the company suffered from rising loan losses, it was working its way through the financial crisis.

Killinger, who was paid more than $100 million between 2003 and 2008, was forced out in 2008.

The subcommittee is holding the first of four hearings on the causes and consequences of the financial crisis.

Killinger and other former Washington Mutual executives will testify today about the role of high-risk loans in the thrift's downfall, in their first appearance before Congress since the bank's collapse.

Their testimony follows the panel's 18-month investigation, which found that WaMu's lending operations were rife with fraud and that management failed to stem the deception despite internal probes.

[2banana]

Why is Kerry Killinger not in jail????

[hiho hiho]

You need to read this written statement

http://assets.bizjournals.com/cms_media/seattle/Kerry%20Killinger%20Written%20Statement%204-12-10.pdf

[DuncanWaring]

Sez him.

Here's a countering opinion:

Gee, It Took The Senate THREE YEARS? (WaMu).

[sitetest]

I like my option-ARM, variable rate WAMU (now Chase) mortgage. I’m not crazy that Chase now owns it, but it has been a good mortgage for me.

[skyman]

It’s their stupid name that caused it:

WaMu

How lame is that?

[mono]

WaMu gave me a big line of credit and a competitive interest rate on a credit card. I used the card and always paid early with two and a half times the minimum payment. Then for no reason they dropped the line to the outstanding balance and raised the apr to 30 percent. I paid them off in full the next month and closed the account. They were predators and I am glad they were shut down, except they really wernt and are still doing business under a new name and ownership.

[Noamie]

I had personal and business accounts with WAMU, owned stock, and had 2 WAMU credit cards.

I did not see then, nor do I believe now, that WAMU’s collapse and sale was the fault of the CEO.

If you were paying attention then it was clear that JP Morgan Chase (who had been trying and failing to compete with WAMU for years) had the power of government (friends in high places), the cash on hand (basically provided by government), and a “crisis” to seize them without anyone really understanding what was happening. It basically occurred overnight; after trading hours.

I was surprised by how fast (and how) it happened and I was actually looking for it.

This is just another example of how dangerous Government is when allowed into the marketplace and when it is allowed to choose who wins and who looses — not an example of WAMU “corporate greed” or anything stupid and ambiguous like that.

Seriously, is it “greedy” to not have any company at all? OR would your “greed” be better served by having something that actually makes money?

[longtermmemmory]

How does this affect forclosures of mortgages and promisory notes executed by WaMu?

[Uncle Hal]

In the 1980's I represented WM as a mortgage correspondent for the bank in CA. I found them to be very conservative and rather provincial in their lending policies. When they came down and bought a lot of the big S & L’s in CA. I guess their attitude changed. It is too bad it had to come to this.