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.

Wachovia has big news today. Shares of falling in the premarket after the company ousted CEO Ken Thompson.

Wachovia stated he is stepping down at the request of the board, saying no single precipitating event calls because the board to reach the decision, but a series of previously disclosed disappointments and setbacks cumulatively have negatively impacted the company and performance. Perhaps you can call it an understatement.

Shares down 57% in the past 12 months.

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

The average time that a home sits on the market when it is for sale is now 11 months.

So what does that mean to you and me? It means nothing. Despite what is said by the professionals, we are still facing the largest portfolio of mortgage resets from right now in May 2008 to September 2008 (Mortgage reset chart).

So what does this really mean? Now we are on to something. Until the underlining mortgage issues are resolved, meaning the homeowners with mortgage resets that become unaffordable, of which only 30% of the affected homeowners are being helped, expect further home depreciation.

CNN.com has stated within the last few weeks that even with all the programs developed by the government, only about 30% of the homeowners can be helped. The reason is obvious. Why does any, for profit banking institution, want to take on the problems of another bank?

And the math is so simple. Add the inflationary pressures of oil, energy and what they mean to consumers discretionary dollars, as well as, the volume of adjustable rate mortgages that are resetting (remember that it takes between 6 months and 12 months to foreclose on a home - every state has their foreclosure laws) and you have a formula saying that we will be having credit and housing deterioration until at least 2010.

As we continue to analyze and manage our product set, Chase has made the decision to discontinue offering our Subprime and Home Equity products through our Wholesale channel.

New Wholesale Subprime and Home Equity registrations will not be accepted after Friday, May 16, 2008.

New foreclosure filings rose 4% in April and were nearly 65% higher than the level recorded a year earlier, according to RealtyTrac.

The company’s U.S. Foreclosure Market Report indicates that foreclosure filings, default notices, auction sale notices, and bank repossessions were reported on 243,353 properties in April.

"The total number of U.S. properties with foreclosure activity in April was the highest monthly total we’ve seen since we began issuing the report in January 2005," said James J. Saccacio, RealtyTrac’s chief executive officer. "Although only about 2% of households nationwide are in foreclosure, these properties contribute to already-bloated inventories of homes for sale and put downward pressure on home values."

The company noted California, Florida, and Ohio recorded the highest foreclosure rates in April.

President Bollinger, Dean Hubbard, Co-Chairman Kravis, and distinguished guests, I am very pleased to be here and especially honored to receive the Columbia Business School’s Distinguished Leadership in Government Award. This evening I would like to offer a few thoughts on mortgage markets and the recent increase in the pace of delinquencies and foreclosures. My particular focus will be on geographic variation in mortgage performance and how that variation can help us better understand and prevent foreclosures. I will also discuss some initiatives taken by the Federal Reserve to address the foreclosure crisis as well as other policies that might be used to strengthen mortgage and housing markets.

Geographic Variation in Loan Mortgage Performance

As my listeners know, conditions in mortgage markets remain quite difficult, and mortgage delinquencies have climbed steeply. The sharpest increases have been among subprime mortgages, particularly those with adjustable interest rates: About one quarter of subprime adjustable-rate mortgages are currently 90 days or more delinquent or in foreclosure. Delinquency rates also have increased in the prime and near-prime segments of the mortgage market, although not nearly so much as in the subprime sector. As a consequence of rising delinquencies, foreclosure proceedings were initiated on some 1.5 million U.S. homes during 2007, up 53 percent from 2006, and the rate of foreclosure starts looks likely to be yet higher in 2008. Not all foreclosure starts result in the borrower’s loss of the home; sometimes the borrower is able to make up the missed payments or other arrangements are made with the lender. Given the number of borrowers in distress and the weakness of the general housing market, the share of foreclosure initiations that ultimately result in the loss of the home seems likely to be higher in the current episode than customarily has been the case.

It is not just Bank of America that is reeling from subprime problems, the largest banks in the world have posted $290 billion of credit losses, since the beginning of 2007.

Bank of America Net Drops 77%

The Federal Reserve Was Ready to Make Lending Available to Other Brokers on Same Day They Helped Out Bear Stearns; Borrowers at Discount Window Included Goldman Sachs, Morgan Stanley and Lehman Brothers.