The Reckoning - WaMu Built an Empire on Bad Loans - Series - NYTimes.comworth readingin full

[David Farber <dave () farber net>]

http://www.nytimes.com/2008/12/28/business/28wamu.html?_r=1&hp


By Saying Yes, WaMu Built Empire on Shaky Loans
        
By PETER S. GOODMAN and GRETCHEN MORGENSON
Published: December 27, 2008
“We hope to do to this industry what Wal-Mart did to theirs,Starbucks  
did to theirs, Costco did to theirs and Lowe’s-Home Depotdid to their  
industry. And I think if we’ve done our job, five years from now  
you’re not going to call us a bank.”


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.



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