By Saying Yes, WaMu Built Empire on Shaky Loans

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.

“I’d lie if I said every piece of documentation was properly signed and dated,” said Mr. Parsons, speaking through wire-reinforced glass at a California prison near here, where he is serving 16 months for theft after his fourth arrest ”” all involving drugs.

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Posted in * Economics, Politics, Credit Markets, Economy, Housing/Real Estate Market, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--

6 comments on “By Saying Yes, WaMu Built Empire on Shaky Loans

  1. Juandeveras says:

    Ah, yes, WaMu ( and IndyMac ) – real heavyweights. I guess the same could be said for Fannie and Fweddie.

    Comment: WaMu stockholders are unable to get their investment back though WaMu was acquired by, I believe, Citibank. Not a peep fwom Bawnie Fwank on dat one.

  2. Ad Orientem says:

    The reason the stockholders can’t get their investment back is because WaMu went broke. WaMu was not acquired by Citi. Its assets were.

    Caveat Emptor

  3. Juandeveras says:

    Sorry, it was JPMorganChase who got WaMu’s assets.

  4. Ad Orientem says:

    I stand corrected. But the point remains.

    Christ is born!
    Glorify Him!
    John

  5. Jeffersonian says:

    The depth of irresponsibility here is astonishing. I can’t believe this went on for more than a week without regulators, stockholder or both coming down on the fraudsters with both feet.

  6. Harvey says:

    Some people get very one track with their eyes and mind, particulary if $$$ are involved.