Shakeups at Washington Mutual and Wachovia. Roundtable Discussion with Andrew Seibert of Nextier Wealth Management and Forbes CEO Steve Forbes.

Washington Mutual shares are down after Kerry Killinger stepped down as chairman. Shares of Wachovia are falling below it’s lowest value in almost 13 years after Ken Thompson was ousted.

Chairman Lanty Smith has been appointed interim CEO. Is this new management what these companies need to get back on track? Are there more troubles for financials?

I think their values will go lower until they get a feel for who will take over. There are probably more Writedowns to come.

These banks have not gone beyond the problem of the Subprime Mortgage Industry and there is possibly another shoe to fall.

If the Credit Deterioration continues, there will be many more problems.

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Washington Mutual , hard-hit by the mortgage and credit crises, will replace Chief Executive Kerry Killinger as chairman of the board.

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NEW YORK, April 15, 2008 (PRIME NEWSWIRE) — Beleaguered investors of Washington Mutual (NYSE:WM) were delivered more bad news by the company in Tuesday’s after-hours earnings announcement. The company reported a first-quarter loss of $1.14 billion and indicated that it expects Writedowns of $12 billion to $19 billion of its $187 billion portfolio of single family residential home loans in 3 to 4 years.

Litigation on behalf of Washington Mutual employees and 401(k) plan participants has commenced against the company for alleged violations of the Employee Retirement Income Security Act (ERISA) in the United States District Court for the Western District of Washington. If you are an employee of Washington Mutual and wish to discuss the investigation or have questions concerning this notice or your rights, please contact Scott+Scott (scottlaw@scott-scott.com, (800) 404-7770, (860) 537-5537), for more information. There is no cost or fee to you.

Scott+Scott is a law firm with significant experience in prosecuting investor and employee class actions. The firm currently is litigating major securities, antitrust and employee retirement plan actions throughout the United States and represents pension funds, foundations, individuals and other entities worldwide.

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WAMU recently said that they wanted to, “Strengthening the Mortgage Industry” in a press release and now they need their mother’s help to go to the bathroom. So which direction are they these so called leaders really leading?

Washington Mutual began offering this ‘new’ full disclosure program to the mortgage clients delivered through mortgage professionals BUT not to the clients they receive via their retail locations. Why don’t their retail clients deserve this full disclosure?

So the reputation of WAMU appears to be tarnished at best. It has been so bad at WAMU that even powerhouse Credit Suisse Questioned the “credibility” of the Washington Mutual management.

On a very serious note, we feel bad for their stockholders, the hundreds of employees they are letting go and the millions affected by, what the world has come to know as a ‘Lack of Leadership’.

Here is their political spin in an effort to try to look good.

April 7, 2008, WaMu announced significant changes affecting our Home Loans business. As part of this announcement, and consistent with the company’s retail focused strategy, WaMu has made the very difficult decision to exit the Wholesale lending business. In order to have an orderly shut down, we have determined the following critical dates:

April 10, 2008: Last date to submit new applications or locks.

May 31, 2008: All WaMu Wholesale Sales Centers will be closed by this date.

June 13, 2008: Generally, all loans must be closed/funded by this date. We will, however, honor outstanding loan commitments with expiration dates after

June 13, 2008 up until the
expiration dates set forth in those commitments.

June 30, 2008: All WaMu Wholesale loan fulfillment centers (LFCs) [San Diego, CA; Pleasanton, CA; Downers Grove, IL; and Jacksonville, FL] will be closed by this date.

Current Pipeline:
*Locked loans with an expiration date prior to June 13, 2008 may be extended per current policy provided the loan is closed/funded by June 13, 2008.

*Effective April 8, 2008, a condition will be added to each new commitment which will supersede the normal expiration provision.

*Floating loans must generally be locked, closed/funded by June 13, 2008. Again, they may only close and funded after June 13, 2008 if a loan commitment has already been issued and the commitment
expires after June 13, 2008.

*If a loan is locked with an expiration date past June 13, 2008, it will not be honored unless a loan commitment has been issued and the commitment expires after June 13, 2008.

*We are unable to make any exceptions regarding the closed/funded date of June 13, 2008. Again, however, we will honor outstanding commitments with commitment expiration dates beyond
June 13, 2008.

WaMu will continue to originate loans through Consumer Direct and our Retail Lending channel.

Your Account Manager or Sales Manager will be available to support you while we transition out of this business.

This is a very hard day for WaMu and all of Wholesale Lending. We have appreciated your partnership and support over these many years and wish you the best as we move on to new opportunities.

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Credit Suisse Questions Washington Mutual Management

In a new research report, Credit Suisse calls into question the “credibility” of Washington Mutual’s management, citing what it calls “numerous upward revisions” to the thrift’s credit expectations on future writedowns.

“We are concerned by the deterioration of WaMu’s credit metrics and we do not believe WaMu is out of the woods,” writes analyst Moshe Orenbuch. (The nation’s largest thrift recently raised $3 billion in convertible preferred stock, offering a coupon of 7.75% on the notes).

Credit Suisse predicts that WaMu faces credit losses of nearly $5 billion in 2008, with an additional $3.55 billion of reserve additions. “We believe that (nonperforming assets) should increase to roughly $10 billion or 3% of total assets,” Mr. Orenbuch says. Credit Suisse has a “neutral” rating on the stock.

In trading Tuesday, WaMu’s share price fell to a new 52-week low of $14.11. Its high is $46.

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Part 2

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Reaction with Mark Demos of Fifth Third Asset Management; Washington Mutual Expects Net Loss for 4Q, Will Raise $2.5 Billion in Additional Capital, Reduce Dividend; WaMu Closing About 190 of 336 Home Loans Centers and Sales Sites

Washington Mutual, once a powerhouse in the mortgage industry, says it will trim 22% of its home loan staff, eliminate its subprime channel, and take a whopping $1.6 billion writedowns in the fourth quarter.

On Monday afternoon the nation’s largest thrift also said it would raise $2.5 billion in new capital through a convertible preferred offering and slash its dividend by 73%.

The Seattle based WaMu said it remains committed to the mortgage business but noted that the industry is undergoing a “fundamental shift due to credit dislocation and a prolonged period of reduced capital markets liquidity.” In total, it is eliminating 3,150 jobs, including 2,600 in its mortgage group. As previously reported, it is also closing its warehouse division.

In trading Tuesday morning, WaMu’s stock was down 9% to $19.88 a share.

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Washington Mutual recently began requiring its brokers to use a newly created disclosure form they developed which, they say will help borrowers better understand mortgage loan terms.

However, the majority of homeowners already complain they have too many disclosures and find the the required barrage of paperwork cumbersome and difficult to understand.

WAMU also stated they will call and bother all prospective borrowers to review the mortgage terms with them.

But is this a smokescreen for their bigger problems?

Click here to view letter – /media/letters/11-08 Ltr to Cuomo.pdf

Ironically, New York Attorney General Andrew Cuomo said Wednesday he subpoena Fannie Mae and Freddie Mac as part of a widening probe of the residential mortgage industry.

The subpoenas seek information on mortgages purchased by the government sponsored enterprises(GSE’s) from their seller/servicers, including Washington Mutual of Seattle.

The GSEs also agreed to a demand by the New York Attorney General that they hire an independent examiner to conduct a review of all WaMu appraisals on mortgages they purchased.

“In order to fulfill their duty to consumers and investors, Fannie Mae and Freddie Mac must ensure that Washington Mutual’s mortgages have not been corrupted by inflated appraisals,” the attorney general said in a statement.

It appears they have lost their focus. If indicted, WAMU’s problems are much greater than any broker or pseudo disclosure.

‘People in glass houses shouldn’t throw stones’.

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New York Attorney General Andrew Cuomo Widens Investigation to Fannie Mae and Freddie Mac.

Among other things, the subpoenas seek information on mortgages purchased by the government sponsored enterprises(GSE’s) from their seller/servicers, including Washington Mutual of Seattle.

The GSEs also agreed to a demand by the New York AG that they hire an independent examiner to conduct a review of all WaMu appraisals on mortgages they purchased.

In 2006 WaMu sold north of $30 billion in loans to the GSEs. “In order to fulfill their duty to consumers and investors, Fannie Mae and Freddie Mac must ensure that Washington Mutual’s mortgages have not been corrupted by inflated appraisals,” the attorney general said in a statement.

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Loan quality deteriorates
Change in bad loans/chargeoffs.*

1. Washington Mutual 284% (This appears to be the reason they are making so many foolish mistakes.)
2. Zions Bancorp 486%
3. Keycorp 234%
4. Fifth Third 140%

*Source: Punk Ziegel

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The housing market is deteriorating so quickly that credit assumptions made only a few months ago are now “unrealistic” and many banks and thrifts will likely have to hike their provisions for loan losses again, according to an analyst at Friedman, Billings, Ramsey.

Washington Mutual “revised its provision for loan losses by $1 billion on two separate occasions over the last two months, and WaMu is not the only financial company that has revised its credit costs,” an FBR equity research report says.

In July, WaMu executives estimated that loss provisions would range from $1.5 billion to $1.7 billion this year. Now the giant Seattle thrift estimates that provisions will be in the $2.7 billion to $2.9 billion range. In reporting third-quarter results, WaMu increased its loan loss reserve from $372 million to $967 million.

The company also reported a 72% drop in earnings from a year ago. “We still believe there could be more upside to www.wamu.com provision levels, which would result in lower earnings estimates,” the FBR report says.

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What kind of industry leader does not follow their own lead? WAMU, that is who.

In a desperate attempt to recapture a massively declining mortgage portfolio, WAMU has single handedly put all the mortgage industry blame on mortgage brokers and called themselves a “leader” in the process.

WAMU has decided not to mention when they, as a direct to consumer mortgage lender, offer a mortgage to a homeowner, they disclose ABSOLUTELY NONE of their own up-front, but hidden from you, consumer costs. These are the very same fees they say mortgage brokers have to disclose BUT already do.

As a ‘national lender’, WAMU is given a free pass under their Federal Banking Charter to “HIDE” all the upfront money they make on a mortgage transaction.

Did you know that WAMU offers EVERY mortgage client their business plan absolutely free? Yes, absolutely free. In fact it is given to every homeowner at the time of closing and it is called the “Truth In Lending”.

This document shows both you and WAMU how much of your money they are going to take from you, month after month and year after year – at your expense. In fact they have documented they have taken so much of your money that they brag below, “WaMu and its subsidiaries had assets of $312.22 billion”.

So if WAMU and all banks are so confident that the mortgage problem is exclusively the fault of mortgage brokers and lack of consumer disclosure, where is their press releases, like the one below blaming mortgage professionals.

They should be bragging about how they are now going to disclose to all of the American homeowners how much money they are making in ‘hidden up-front fees’ when they do a mortgage – just like the press release we are so happy to publicize for them.

I know that they are a ‘well respected’ for-profit, publicly traded company, so we will be monitoring them for these, so to be released announcements.

My dad use to tell me, “if you are not part of the answer – your part of the problem”.

                    Strengthening Mortgage Industry

    --  key terms of the loan requested by the broker such as loan
        amount, loan term, whether the interest rate and mortgage
        payments may change, and whether the borrower's pricing
        package carries a prepayment fee, and  

    --  the amount of all compensation the borrower will pay the
        broker for their services, including broker points, or
        administrative or processing fees, and whether the broker has
        requested a yield spread premium.

Washington Mutual of Seattle, one of the largest warehouse financiers in the residential mortgage industry, is exiting that business.

A company spokeswoman confirmed the move. She said the warehouse group is in a “wind-down phrase” and that WaMu employees “just received the news themselves.”

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J.D. Power and Associates Reports: Although Borrowers Say Their Primary Mortgage Lenders Are More Flexible About Late Payments, Mortgage Customers Still Believe Lenders are Generally Less Accommodating Than They Could Be

BB&T Ranks Highest in Customer Satisfaction with Primary Mortgage Services

WESTLAKE VILLAGE, Calif., Aug. 1 /PRNewswire/ — Amid the turmoil in the housing market and mortgage markets, mortgage customers who report making at least one late payment in the past 12 months indicate that lenders are showing some flexibility in scheduling late payments, but tend to be less understanding and accommodating of their circumstances when compared to 2006, according to the J.D. Power and Associates 2007 Primary Mortgage Servicer Study(SM) released today.

Credit, Loan Size or Loan To Value – Do NOT Matter

The study finds that while borrowers who have made late payments indicate their lenders are slightly more flexible in scheduling payments, customer ratings for the ability of lenders to understand their specific circumstances and their willingness to work with them declined from the 2006 study.

“Despite lenders being flexible with late payment situations, customers still feel as if their mortgage servicer is being less considerate of their specific circumstances,” said Tim Ryan, senior research director of the finance and insurance practice at J.D. Power and Associates. “It is mutually beneficial for both borrower and lender to work through these difficult time periods, and lenders can support the majority of these customers by being even more considerate of their situation. These circumstances often lead to the development of valuable, regular-paying customers.”

BB&T (Branch Banking and Trust) ranks highest in overall customer satisfaction with a score of 860 on a 1,000-point scale. M & T Mortgage follows in the rankings with 828 and Citizens Bank ranks third overall with a score of 825. These lenders all perform particularly well in keeping billing statement error rates lower than the industry average; providing a wide range of options for making payments; providing flexibility when scheduling electronic payments; designing and/or using automated phone systems that address customer needs; and handling customer contacts quickly and efficiently.

USAA, a financial services provider open only to the U.S. military community and their families and therefore not included in the rankings, also achieves a high level of customer satisfaction.

The study finds that there are considerable financial benefits for lenders in delivering a highly satisfying customer experience, including increased referrals and higher customer retention rates-which is the percentage of customers who pay off a loan and then refinance or take out a new mortgage with their current lender. Specifically, doubling the rate of customer retention from the industry average can result in an increase of nearly 3 percent in mortgage servicing valuations, or approximately $38 million for lenders with a $100 billion portfolio.

“In addition to the benefit of increasing servicing right valuations, moving customers to high commitment levels can triple the number of recommendations, almost double the number of additional products that the customer utilizes and reduce marketing costs for generating new business,” said Ryan. “To achieve higher retention rates, lenders can first and foremost enhance the billing and payment process to make it more convenient, and dramatically reduce errors through systems such as e-mail notifications and automatic payments.”

The study also finds that customers who say they “definitely will refinance” with their current lender are much more likely to make monthly payments via the Automated Clearing House (ACH) method, which allows the lender to take payments directly from the customer’s bank account. ACH can eliminate issues with lost, late and misapplied payments, which all negatively impact satisfaction. In addition, the elimination of high-impact errors — particularly, the mismanagement of tax and insurance escrow accounts and payments — and the prompt and precise resolution of problems can directly and positively impact satisfaction.

The 2007 Primary Mortgage Servicer Study is based on responses from 11,481 home owners regarding their experiences with their primary mortgage servicer. The study was fielded in three waves in November 2006, February 2007 and May 2007.

For more information on customer satisfaction with home mortgage providers, visit JDPower.com.

Overall Primary Mortgage Servicer Satisfaction Ranking
(Based on a 1,000-point scale)

BB&T (Branch Banking and Trust) 860
M & T Mortgage 828
Citizens Bank 825
Countrywide Home Loans 824
SunTrust Mortgage 822
First Horizon Home Loans 818
Wells Fargo 817
GMAC Mortgage 816
Regions Mortgage 807
CitiMortgage 805
Chase 804
Bank of America 803
Washington Mutual 798
Industry Average 798
Wachovia 797
Fifth Third Bank 790
U.S. Bank 788
World Savings 787
PHH Mortgage 786
ABN AMRO Mortgage 784
National City Mortgage 784
IndyMac Bank 781
USDA RHS 772
CitiFinancial 771
Aurora Loan Services 762
American Home Mortgage 751
Everhome Mortgage 748
Beneficial 747
*HSBC Mortgage 742
Ameriquest Mortgage 738
CitiFinancial Mortgage 738
Homecomings Financial 733
Midland Mortgage Company 706
Greentree Mortgage 692
Litton Loan Servicing 688
EMC Mortgage Corporation 683
Vanderbilt Mortgage and Finance 672
Option One Mortgage 669
Ocwen Financial 627

**USAA Federal Savings Bank 910

Included in the study but not ranked due to small sample size are: Charter One Bank, CIT Group, CitiCorp Trust Bank, Coldwell Banker, Ditech.com, First Franklin, Flagstar Bank, GreenPoint Mortgage, HomeEq Servicing, Household Finance, Navy Federal Credit Union, Saxon Mortgage, Sovereign Bank, and Taylor, Bean & Whitaker Mortgage.

*HSBC Mortgage may include responses for HSBC Mortgage Corporation (USA) and HSBC Mortgage Services.

**USAA is a financial services provider open only to the U.S. military community and their families and therefore is not included in the rankings.

About J.D. Power and Associates

Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, performance improvement, training and customer satisfaction. The firm’s quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies

Founded in 1888, The McGraw-Hill Companies (NYSE:MHP) is a leading global information services provider meeting worldwide needs in the financial services, education and business information markets through leading brands such as Standard & Poor’s, McGraw-Hill Education, BusinessWeek and J.D. Power and Associates. The Corporation has more than 280 offices in 40 countries. Sales in 2006 were $6.3 billion. Additional information is available at http://www.mcgraw-hill.com/.

Media Relations Contacts:
Syvetril Perryman Danielle Kowalski
J.D. Power and Associates Cohn & Wolfe
2625 Townsgate Road, Suite 100 8730 W Sunset Blvd., 5th Floor
Westlake Village, Calif. 91361 Los Angeles, Calif. 90069
(805) 418-8103 (310) 967-2958
syvetril.perryman@jdpa.com danielle_kowalski@cohnwolfe.com

No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. http://www.jdpower.com/corporate
Photo: http://www.newscom.com/cgi-bin/prnh/20050527/LAF028LOGO-a
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PRN Photo Desk, photodesk@prnewswire.com

Source: J.D. Power and Associates

CONTACT: Syvetril Perryman of J.D. Power and Associates, +1-805-418-8103,
syvetril.perryman@jdpa.com; or Danielle Kowalski of Cohn & Wolfe,
+1-310-967-2958, danielle_kowalski@cohnwolfe.com, for J.D. Power and
Associates

Web site: http://www.jdpower.com/

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• Hard Hit Washington Mutual Replaces Chief Executive Kerry Killinger