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.