The “housing correction” is turning out to be “more dramatic and more rapid” than Kerry Killenger, WaMu’s chairman and chief executive had expected.
From the WSJ:
The biggest hit was felt in WaMu’s home-loans unit, which widened its quarterly loss to $348 million from a loss of $23 million a year ago. As has been the case with other lenders, most of the problems centered on mortgages to borrowers with subprime credit, as well as home-equity loans.
In remarks to analysts, Mr. Killinger said the housing-price correction was more dramatic and rapid than anticipated, and that forecasting what will happen next is difficult because conditions are changing so quickly. Still, he said, “I’m very pleased with how we’ve managed the company through this period of stress.”
WaMu’s third-quarter loan-loss provision, or funds set aside in anticipation of bad loans, was $967 million, compared with $166 million a year ago and $372 million in this year’s second quarter.