Oct

6

Why WAMU Will Not Follow Their Own Lead

Filed Under Mortgage Editorial, Mortgage Industry Press Release, Washington Mutual 
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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”.

WaMu Implements Industry Leading Standard for Mortgage Brokers, Launches Direct Call Program New Processes Aimed at Building Consumer Knowledge and

                    Strengthening Mortgage Industry

SEATTLE–(BUSINESS WIRE)–Oct. 1, 2007–Washington Mutual (NYSE:WM) today unveiled a new, industry-leading standard for mortgage brokers with whom it does business to help ensure that borrowers fully understand the terms of the loan their brokers are requesting in addition to the total compensation the borrower will pay to the broker for their services.

As part of its new broker standard, WaMu will require evidence that the broker has made certain disclosures to the borrower early in the application process, including:

    --  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.

In addition, a WaMu representative will attempt to call every borrower who is represented by a broker prior to closing to review the key loan terms directly with the customer.

“We believe our mortgage broker standard and direct call program should become the new industry benchmark for brokers and lenders across the nation,” said Kerry Killinger, WaMu Chairman and CEO. “By adopting these standards, together we can increase consumer knowledge of the home loan process and bring about positive, meaningful change to the mortgage industry.”

“Our wholesale business is an important component of our lending strategy and we value our relationships with the high-quality and customer-focused brokers we do business with,” said David Schneider, WaMu’s Home Loans President. “We believe that brokers will embrace this standard because an educated and informed consumer is the best customer for both WaMu and brokers alike.”

WaMu has a long history of taking a leadership role in addressing the credit needs of its communities and setting the highest standards for responsible lending. In 2001, WaMu established its Responsible Mortgage Lending Principles, becoming one of the first lenders to create specific principles to guide its mortgage lending activity.

Since that time, the company has continued to take proactive steps to respond to the needs of borrowers. These industry innovations include the commitment to refinance up to $2 billion in subprime loans, announced in April, to assist current borrowers feeling the effects of this challenging environment. WaMu also led the industry in implementing subprime lending standards that eliminated subprime stated-income loans and subprime adjustable rate mortgage loans with initial fixed-rate terms of less then five years (effectively the 2/28 and 3/27 products). The standards also require tax and insurance escrow accounts with all new subprime loans WaMu originates and a WaMu conversation with the borrower before loan documents are prepared.

(Note to editor: A copy of the new broker disclosure form is available upon request.)

About WaMu

WaMu, through its subsidiaries, is one of the nation’s leading consumer and small business banks. At June 30, 2007, WaMu and its subsidiaries had assets of $312.22 billion. The company has a history dating back to 1889 and its subsidiary banks currently operate more than 2,700 consumer and small business banking stores throughout the nation. WaMu’s press releases are available at http://newsroom.wamu.com.

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