Financial collapse and housing: WaMu execs testify before Senate

Update: CSPAN3 livestreaming the hearing here

The Senate seems to have quite a bit of evidence suggesting the WaMu team deliberately securitized bad bad bad loans as ‘great!’ loans..

WSJ live blogging it here

“The worst managed business I had seen in my career.” That is how Washington Mutual’s former president described his company’s home loan division.

The mortgage lending practices at the Seattle thrift take center stage at a Senate hearing this morning.
The Senate Permanent Subcommittee on Investigations says WaMu did little to stop the loan fraud and generally risky and highly defective securitization practices in its mortgage business

WaMu’s defense? Former CEO Kerry Killinger says he reigned in his company’s mortgage business and blames his thrift’s collapse on unfair and biased regulators who were willing to save Wall Street firms, but not his own

• • 7:11 am
  • by Michael Corkery
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  Levin: Killinger made $11 million to $20 million a year, from 2003 to 2007. He was paid $25 million when he stepped down in 2008, as his thrift was going down the tubes.  Killinger may have complained about not being part of the Wall Street club (see earlier Deal Journal post). But he sure was paid like one of club.

• 7:04 am
• by MIchael Corkery
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OK, Levin, we are about to say “uncle” here. The Senator is now defining what an option ARM loan is.

• 6:59 am
• by Michael Corkery
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This is a heck of an introduction from Levin. He’s been talking for about 30 minutes now. But we can’t blame him. Levin and his committee do appear to have the goods on WaMu: internal emails and other documents showing evidence of mortgage fraud.  Other documents show attempts to hide the problems from regulators. This sets WaMu apart from many other large mortgage companies, where fraud has been suspected but never proven.