Regulators Asleep at the Wheel on Washington Mutual

The New York Times has gotten hold of a draft report blaming the FDIC and the Office of Thrift Supervision for not moving on Washington Mutual by lowering their rating. The official report will be released to the public next Friday. It appears the Office of Thrift Supervision received 15% of their assessment fees from Washington Mutual.

The two agencies that oversaw Washington Mutual, the investigation found, feuded so much that they could not even agree to deem the company “unsafe and unsound” until Sept. 18, 2008.

By then, it was too late. A week later, amid a wave of deposit withdrawals, the government seized the bank and sold it to JPMorgan Chase for $1.9 billion. It was by far the largest bank failure in American history.

Wamu sues FDIC for over $13 billion

Remember Wamu? Washington Mutual bank which ran itself into the ground over liar loans and various unsound banking practices?

They are now suing the FDIC:

Washington Mutual Inc, the failed U.S. savings and loan, has sued the Federal Deposit Insurance Corp for well over $13 billion in connection with the loss of its banking operations, which was acquired by JPMorgan Chase & Co.

In a complaint filed with the U.S. District Court for the District of Columbia, the thrift's former parent accused the FDIC of having on January 23 made a "cryptic disallowance" of its claims, prompting the lawsuit.

It also accused the FDIC of agreeing to an unreasonably low price in arranging the a $1.9 billion sale of the banking business to JPMorgan on September 25, when regulators seized Washington Mutual and appointed the FDIC as receiver.

NEWSFLASH: FDIC siezes Washington Mutual deposits and transfers to JP Morgan

CNBC is reporting

that the FDIC forced a sale of Washington Mutuals deposit accounts to JP Morgan Chase. No further detail has been released yet. Recently, Wamu's debt fell into junk status. Wamu had been looking for partners or acquirers for the entire operation, yet no one wanted to bite. The bank was one of those who was hardest hit by the mortgage meltdowns, resulting in the resignation of some of it's management.

WaMu is now Junk - Update, Up on the Auction Block

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.

WaMu for Sale via Auction:

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.