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The Downfall of WaMu
Welcome to the belly of the subprime beast: In its investigating of Washington Mutual, The New York Times discovers former mortgage brokers like John D. Parsons, who left his methamphetamine paraphernalia in view of his employees and once gave a mortgage to a mariachi singer who claimed to make six figures and proved his profession by posing for a photograph in his uniform. Another employee was yelled at for calling a bank to check up on a borrower’s savings (nevermind the $145,000 discrepancy). Of course, Parsons and his kind received their orders in their trenches from the office of CEO Kerry Killinger, who collected $88 million in compensation between 2001 and 2007. Washington Mutual was particularly invested in adjustable-rate mortgages—by 2006 they made up 70 percent of the company’s new home loans. JP Morgan bought WaMu in September.
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Prove it....what a load of crap. This story has been told over and over and I doubt it is true. WAMU had trouble because it had heavy exposure to the Calif market. Prices were high so the industry created programs to allow people to buy these overpriced homes and the gov't let them. When the bubble burst Wamu had more exposire than the rest of them, but because Paulsen and Jamie DImon were in cahoots WAMU goes down, Chase gets the assets for a song as payback for bailing out Bear Stearns. WAMU and its shareholders got screwed by the Bush administration.
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