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.

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.

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.

Bordering On Insanity

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.

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.