As part of a borrowers’ assistance program designed to help WaMu homeowners with subprime mortgage loans stabilize their finances and avoid foreclosure, Washington Mutual (NYSE:WM) announced Wednesday a new program that will allow borrowers to refinance up to $2 billion in subprime loans at discounted interest rates. Under the program, WaMu subprime borrowers who remain current on their existing loans and anticipate pending payment increases may apply for new discounted fixed-rate loans or other mortgage products available to them, the company said. Key elements of the program will include free credit counseling for WaMu subprime borrowers, as well as a discount on subprime loans for eligible borrowers — currently, for example, WaMu said borrowers qualifying under the newly-announced program can obtain a 30-year fixed-rate subprime loan refinance with a 50 basis-point discount.
â€œWe’re reaching out to our subprime borrowers to help ensure they are in the best possible position to manage challenges posed by payment adjustments,â€? said Kerry Killinger, WaMu chairman and chief executive officer. â€œWe want our customers to know what’s ahead, to avoid surprises, and to understand the choices available to them.â€? Killinger also said that for borrowers whose loans have become delinquent and are in need of assistance, the company has an experienced team of mortgage professionals focused on providing workout options aimed at keeping borrowers in their homes. â€œEarly intervention combined with expanded options can make a major difference,â€? said David Schneider, president of WaMu’s home loans group. â€œCustomers who work with us to develop a payment plan are more likely to succeed in avoiding foreclosure and balancing other household financial obligations.â€? Finally, Killinger noted WaMu’s long history of cooperation with community groups that specialize in borrower education and foreclosure prevention, and said that the company has joined forces with a number of key partners, including the NeighborWorks Center for Foreclosure Solutions and the Homeownership Preservation Foundation, to launch a national effort to avert foreclosures. â€œStepping up and helping our customers stay in their homes is in the best interest of our borrowers, our communities and WaMu,â€? Killinger added. WaMu, through its subsidiaries, is one of the nation’s leading consumer and small business banks. At Mar. 31, 2007, WaMu and its subsidiaries had assets of $319.99 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. For more information, visit http://www.wamu.com.