Uncategorized

Wamu: “Near Perfect Storm” In Housing

By: PAUL JACKSON
September 10, 2007

Advertisements

Per Bloomberg, it looks as if at least some of the nation’s larger banking operations are figuring out that we aren’t facing a short-term market correction in housing and mortgages:

Washington Mutual Inc., the largest U.S. thrift, said that conditions in the housing market are creating a ‘near-perfect storm’ and may force the company to set aside more money to cover bad loans.

Chief Executive Officer Kerry Killinger told the Lehman Brothers Holdings Inc. financial services conference today the bank may have to increase its loan-loss provision by $500 million. Previously the bank forecast provisions of $1.5 billion to $1.7 billion for the full year.

“The combination of rising delinquencies, higher foreclosures, more housing inventories, increasing interest rates on many mortgages and greatly reduced availability of mortgages due to limited liquidity is creating what we call a near-perfect storm for housing,” he said.

Washington Mutual fell $1, or 2.9 percent to $34.02 at 10:04 a.m. in New York Stock Exchange composite trading. The stock has declined 25 percent this year.

“It now appears that housing and capital market corrections will be worse and longer lasting than even we expected,” Killinger said.

HW readers already know what Killinger and WaMu are now realizing — that we’re looking at a credit event impacting the housing and mortgage markets that will have a dramatic impact on market participants over the course of the next 12 to 18 months.


Get your HW Fix

Join more than 3,000 bold subscribers who already get HW's daily email delivered to their inbox -- it's free, and a great way to ensure you don't miss something.

Events

2008 Sep 10 -- 2008 Sep 12

USFN Fall Default Servicing Seminar

Well-attended twice-yearly event series for servicers; closed event for USFN members and invited servicers only.

2008 Sep 17 -- 2008 Sep 20

Five Star Conference

Default and REO industry conference, hosted by trade publication DS News. Heavily attended by REO agents.

2008 Sep 23 -- 2008 Sep 24

Executive Summit on Mortgage Fraud

High-level conference focused on quantifying and managing mortgage fraud. Speakers to include execs from OFHEO, FBI, Fannie, Freddie.

2008 Sep 23 -- 2008 Sep 24

NREDC's 10th Annual FHA Mortgagees Conference

NREDC brings together the best and the brightest speakers and participants for an exciting creative synergy independent of any trade association.

2008 Oct 19 -- 2008 Oct 22

MBA Annual Convention & Expo

The annual conference for MBA members and affiliates, and the largest industry event each year.