This is updating news on a previous post. The waves just keep on coming like a tsunami. The fall out is happening so fast and furious it's difficult to keep up.
Washington Mutual, the nation's largest thrift, has put itself up for sale, the New York Times reported on Wednesday, citing unidentified people briefed on the matter.
This actually was started a few days ago, via Goldman Sachs.
Now an auction implies ...what someone can get it for nothing or ? Details unclear but clearly the next wave in the storm.
Bonddad has more details:
Goldman Sachs, which Washington Mutual has hired, started the process several days ago, these people said. Among the potential bidders that Goldman has talked to are Wells Fargo, JPMorgan Chase and HSBC. But no buyers may materialize. That could force the government to place Washington Mutual into conservatorship, like IndyMac, or find a bridge-bank solution, which was extended to thrifts in the new housing regulations.
Citigroup is also considering an offer, but would likely be able to buy Washington Mutual only if it emerged from a receivership, according to a person close to the situation. JPMorgan is maintaining its posture that it will not bid unless it receives government support, according to another person briefed on the matter
Below is the previous post on WaMu.
Washington Mutual Inc was downgraded to below investment-grade status by Moody's Investors Service, after the largest U.S. savings and loan projected a $4.5 billion third-quarter increase in reserves for bad loans but said it has more than enough capital
Two notches to Ba2.
Look at these facts on ARM options
About 83 percent of the option ARMs issued from 2004 to 2007 were underwritten without full documentation of borrowers' incomes, Fitch said.
``For most borrowers, once their loan resets, there's no place for them to go,'' said Hilts of Fitch. ``A high percentage of them don't have equity, so they can't refinance, and they don't have the income to withstand the payment shock.
Four percent of Washington Mutual's option ARM portfolio probably will reset in the second half of this year and 13 percent, or $7.1 billion, will reset in 2009, according to the SEC filing
The article is about why WaMu is in such trouble. This is just completely irresponsible.
We need an ultimate blog post, a road map analyzing who specifically changed all of these rules, deposit requirements and mortgage requirements to cause this disaster.
What I find amazing is how all of these facts are coming out now. They should have been reported when they were happening.