Corporate Cannibals Got Washington Mutual Mortgage
April 29th, 2010 by Kelley HorneLife for a business is similar to, life for a person. It's difficult to go through all life has to offer watching the rear view mirror. This being true; it is also true ignoring the past makes the future a series of re-educations. For future home owners; paying on a Washington Mutual Mortgage is like walking barefoot on broken glass. If your get through it; the memory will last forever. Many ask, what could cause a company founded in 1889 to suffer such an unflattering demise?
Nearly all Americans desire participation in the American dream, to one degree or another. Millions work, save and invest toward that achievement. In the 1980's and 90's government programs and bureaucratic pressures encouraged banks and investment institutions to actively pursue more mortgage business in the subprime mortgage arena. Washington Mutual was one of those banks.
Throughout this period homes were selling at record pace. Mortgages were being written by both professionals and amateurs. Many of these mortgages were written on people unqualified to purchase homes, and in turn the paper was bought and sold by banking firms like Washington Mutual. (WAMU) Washington Mutual made billions of dollars in sales and grew rapidly however on September 25, 2008 their future collided with the past. As a result Washington Mutual Inc. Came to an end.
On September 26, 2008, JP Morgan Chase acquired Washington Mutual. In a secret and private bidding process, Washington Mutual's strong history of satisfying its customer and usually making sound business decisions came to an un-ceremonial end.
During the after business hours of Thursday, September 26, 2008, JP Morgan Chase acquired Washington Mutual for $1.9 billion. This price was many times less than the net worth of Washington Mutual. $1.9 billion is also much less than the $8 per share offer in secret for control of (WAMU) Washington Mutual by JP Morgan Chase in the same year.
The next day, Friday September 27, 2008; WAMU branch offices opened for business as usual. By all outward appearances, little had changed. Customers were greeted and serviced with all the appropriate courtesies, and business continued as usual, with one major exception. The nation knew JP Morgan Chase now owned Washington Mutual. No longer were customers greeted with, "Welcome to Washington Mutual". Smiles over jittered nerves, masked very worried employees. Employees knew before work or soon after arriving, what happened.
Change was not long in coming. Within weeks, customers paying mortgages began receiving calls from the collections department of JP Morgan Chase. Often these calls came daily and repeatedly. Even more frequently, the customers were not late on their payments. When questioning JP Morgan Chase, they were told the calls were just reminders to send payments. If WAMU customers became upset and demanded explanations; they were given a telephone number to call for voicing their complaints. The number was to an answering machine.
The failure of Washington Mutual Inc. May have been an event waiting to happen. Yielding to political and financial pressures demanding special consideration be granted to people not qualified to buy a house, certainly contributed to its destruction in a major way.
JP Morgan Chase picking up WAMU in a private auction for billions less than what it was worth - is what Washington Mutual Mortgage may have done to competitors. Has JP Morgan Chase learned from WAMU's mistakes? That will be told in the future, if the past arrives again.
Once this point is reached, possibly through bankruptcy, debit cards and prepaid credit cards become the only options left. The pounds and inches have been steadily coming off. It spotted $ 0.22 dividend per share while it hasn't been profitable in.
