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<<SAN DIEGO — As a supervisor at a Washington Mutual mortgage processing center, John D. Parsons was accustomed to seeing baby sitters claiming salaries worthy of college presidents, and schoolteachers with incomes rivaling stockbrokers’. He rarely questioned them. A real estate frenzy was under way and WaMu, as his bank was known, was all about saying yes.

Yet even by WaMu’s relaxed standards, one mortgage four years ago raised eyebrows. The borrower was claiming a six-figure income and an unusual profession: mariachi singer.

Mr. Parsons could not verify the singer’s income, so he had him photographed in front of his home dressed in his mariachi outfit. The photo went into a WaMu file. Approved.

>>



http://www.nytimes.com/2008/12/28/business/28wamu.html?_r=1&...
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Very pathetic. I sold WM at around $40 because they were smelling more and more like CountryWide. I suspected WM had problems but I didn't guess it was as bad as it was. It seems the entire organization was a boiler-room operation. Simple greed and a complete lack of oversight will get you every time. Hopefully our new government will outlaw Option ARM's and stand over lenders with a baseball bat in the future.

A real estate frenzy was under way and WaMu, as his bank was known, was all about saying yes.
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<<Very pathetic. I sold WM at around $40 because they were smelling more and more like CountryWide. I suspected WM had problems but I didn't guess it was as bad as it was. It seems the entire organization was a boiler-room operation. Simple greed and a complete lack of oversight will get you every time. Hopefully our new government will outlaw Option ARM's and stand over lenders with a baseball bat in the future.
>>


Why should the government prohibit some kinds of loans? Just letting WAMU go bust was the right thing to do ---- and I did NOT sell off my stock.

The article argues for better methods to hold CEOs and Boards of Directors accountable for making reasonable decisions, perhaps, although I'm not quite sure how to get the needed transparency there.



Seattle Pioneer
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http://www.bugmenot.com/view/nytimes.com
to log on with out registering.

Funny that when bad loans were being originated, no one said anything to upper corporate management or regulating bodies. 2004 to 2007 there was enough bad loans made that many people had to be aware.
Where were the whistle blowers earlier?
jC
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More here: http://www.ritholtz.com/blog/2008/12/if-you-were-dead-they-w...

“It was the Wild West. If you were alive, they would give you a loan. Actually, I think if you were dead, they would still give you a loan.”

-Steven M. Knobel, a founder of appraisal firm Mitchell, Maxwell & Jackson
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Why should the government prohibit some kinds of loans? Just letting WAMU go bust was the right thing to do ---- and I did NOT sell off my stock.

I had the fortune of making a substantial profit on the stock in the late 90s-early 00's (partly making up for my ATHM loss--everyone needs to hold a stock until the bitter end--it's a life list entry to check off), selling when the price stagnated, but following it off and on ever since. Not sure when the exploitation of Latinos and kick backs to real estate agents began.

It's horrifying to see the corruption that was going on within "The Friend of the Family", as the company styled itself in the 60s, and where I had a passbook account since circa 1962 while I was in grade school, with my parents giving me a few quarters to deposit in an envelope and give to the teacher along with the passbook. The passbook would come back and I would see the numbers increase, including a bit of interest from time to time--I was hooked on saving money! I finally cashed in the passbook as a young adult, watching the teller run it through the machine one last time, printing a string of interest payments in.

Oh, and we've still got a checking account and safe deposit box at the WaMu here in TX--so I guess it's still somewhat a friend of the family, since the name was preserved, like the smile on the Cheshire cat.
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