We all thought it was over, or at least that it had subsided. But the latest financials from Washington Mutual give us pause. Is the worst yet to come from the mortgage fallout? WaMu rose from the ashes of Seattle's great fire over 100 years ago to become America's fifth largest commercial bank. Today, they announced that credit losses this year could amount to between $2.7 to 2.9 billion, which is double their July forecast.
Not only does WaMu have to deal with that inconvenient truth, but the company is also under a bit of fire from New York Attorney General Andrew Cuomo, who alleges that WaMu hired appraisers that inflated home values in order to push through favorable loans to the bank.
In any case, WaMu expects loan originations in 2008 to drop to almost half this year's level of $2.4 trillion (to $1.5 trillion), foreboding that 2008 will likely be another year of anemic home buying.
Washington Mutual image by Coolcaeser [GNU, 1.2]