It must not be fun around WaMu headquarters today. Profits are down a whopping 75%.
From the AP, emphasis ours:
Washington Mutual said its loan loss provision for the quarter will total $975 million. The provision exceeds net charge-offs — loans written off as having no chance of being recovered — by $550 million. Loss provisions, on top of paying current charge-offs, are used to cover future losses.
The company will also write down the value of various loans and portfolios by about $410 million.
Rising delinquencies and defaults among mortgages, especially subprime loans given to customers with poor credit history, have led to the near disappearance of investors willing to buy the loans in the secondary markets and forced lenders to reserve more cash for losses.
Um… damn. We hate it when we estimate incorrectly to the tune of $550 million dollars.