WASHINGTON — The mortgage lending operations of Washington Mutual Inc., the biggest US bank ever to fail, were threaded through with fraud, Senate investigators have found.
And the bank’s own probes failed to stem the deceptive practices, the investigators said in a report on the 2008 failure of WaMu. The panel said the bank’s pay system rewarded loan officers for the volume and speed of the subprime mortgage loans they closed on. Extra bonuses even went to loan officers who overcharged borrowers on their loans or levied stiff penalties for prepayment, according to the report being released today by the investigative panel of the Senate Homeland Security and Governmental Affairs Committee.
But they are working with you to get the best deal possible and get you into that new home.
Senator Carl Levin, Democrat of Michigan, the chairman, said yesterday the panel won’t decide until after hearings this week whether to make a formal referral to the Justice Department for possible criminal prosecution.
If they don't, well....
Justice, the FBI, and the Securities and Exchange Commission opened investigations into Washington Mutual soon after its collapse in September 2008. The report said the top WaMu producers, loan officers, and sales executives who made high-risk loans or packaged them into securities for sale to Wall Street, were eligible for the bank’s President’s Club, with trips to swank resorts, such as to Maui in 2005.
So they were basically doing WHAT EVERYONE ELSE WAS and IS STILL DOING!
Jennifer Zuccarelli, a spokeswoman for JPMorgan Chase, declined to comment on the subcommittee report.
--more--"
And why not make it worse for yourselves.
LIE on top of the THEFT!
"Failed bank’s officials defend their actions; WaMu CEO says unfair treatment was real problem" by Marcy Gordon, Associated Press | April 14, 2010
WASHINGTON — The former chief executive of Washington Mutual, the biggest US bank ever to fail, yesterday defended its actions to reduce risks when the housing bust was looming.
Kerry Killinger, who led the Seattle-based thrift, argued that WaMu had adequate capital and should not have been seized by the government and sold for a bargain price of $1.9 billion in September 2008. The bank “should have been given a chance to work its way through the crisis,’’ Killinger told a Senate panel. Its 18-month investigation found WaMu’s operations were rife with fraud that management failed to stem.
Killinger rejected that conclusion. He argued that even before the crisis struck with force, the government treated WaMu unfairly. He noted it was excluded from a list of large financial firms whose stock could not be sold short under a temporary ban. In short-selling, traders bet a stock price will drop and use borrowed shares to profit from any decline.
Why does the name Buzzy Krongard ring a bell there, readers?
Senator Carl Levin, a Michigan Democrat who heads the panel investigating WaMu, asked two other former senior executives why they failed to act. David Schneider headed the home loans division; David Beck was in charge of selling mortgages packaged into securities to Wall Street investors....
Washington Mutual’s sales of packaged subprime mortgage securities leapt from $2.5 billion in 2000 to $29 billion in 2006. The thrift, with $307 billion in assets, failed in September 2008. It was sold to JPMorgan Chase & Co. in a deal brokered by the Federal Deposit Insurance Corp....
So they both jumped in with both feet!!
Levin has said the panel won’t decide until after the hearings whether to make a referral to the Justice Department for possible criminal prosecution.
--more--"
"Senate panel hits bank regulators for lax WaMu oversight" by Daniel Wagner, Associated Press | April 17, 2010
WASHINGTON — Arguing that bank regulators played a crucial role in creating the conditions for financial crisis, a Senate panel yesterday blasted officials for lax oversight, infighting, and inaction before the largest bank failure in US history.
Lawmakers on the permanent subcommittee on investigations directed withering criticism at officials from the Office of Thrift Supervision, the main regulator of Washington Mutual Inc. They demanded to know why OTS leaders gave executives at WaMu years to correct glaring problems. The executives never addressed regulators’ concerns about risky lending and weak management, but the regulators took no formal action until the global financial crisis already was taking shape, documents show.
“It is not only feeble enforcement, it is pitiful enforcement,’’ said panel chairman Senator Carl Levin, Democrat of Michigan. OTS “was more of a spectator on the sidelines, a watchdog with no bite, noting problems and making recommendations, but not trying to correct the flaws and failures it saw,’’ Levin said.
Levin pointed to an e-mail in which then-OTS chief John Reich called WaMu chief executive Kerry Killenger “my largest constituent assetwise.’’ He said that and other e-mails showed the agency’s submissive attitude toward the banks it was supposed to regulate.
They know who they are REALLY working for!
Reich replied that he picked up the word “constituent’’ while working on Capitol Hill, and said it did not “reflect any sort of sinister or inappropriate relationship.’’
“I am by nature a humble person, I am a casual person and an informal person,’’ Reich said. “It is not at all unusual that I address people . . . by their first name, particularly if I am 10 years older than they are.’’
Keep squirming, slime.
Reich ran the OTS during the mortgage boom and the bust that destroyed several large companies it oversaw — including IndyMac, American International Group Inc., WaMu, and Countrywide Financial Corp....
Fueled by the housing boom, Washington Mutual’s sales to investors of subprime mortgage securities leapt from $2.5 billion in 2000 to $29 billion in 2006. The 119-year-old thrift, with $307 billion in assets, was sold for $1.9 billion to JPMorgan in a deal brokered by the FDIC....
So JPMorgan got it on the cheap in a deal orchestrated by the FDIC, huh?
--more--"
Maybe the Butler did it, 'eh, Reich?
Regulators seize small Lowell bank
Smooth transition to new ownership for Butler Bank sites
Also see: JPMorgan Whacks Away at WaMu
Maybe not; that's pretty strong evidence.
