Marc's Mortgage Matter's

A colleague out West tells me; I used to have Great Western as my bank, which then turned into Washington Mutual, which apparently will now be JPMorgan Chase. WaMu was seized by regulators last night – not waiting for the typical Friday afternoon - and all of its deposits and most of its assets were purchased by JPM, although Chase didn't take any WaMu debt. So any bond holders, hoping to reap those huge yields a few months ago, may be out of luck unless there are large amounts of cash available. Wamu stock once over $40/share went to about a buck and now anything at all is worthless. 

With this FDIC takeover (the largest one yet) and $1.9 billion sale to JPMorgan Chase, Chase became the biggest U.S. bank by deposits. You may recall that back in March, WaMu rejected a $4/share offer by Chase. Depositors may see little change today (I drove by last night to see if there was a padlock on the door, but nothing so dramatic had happened). This also leaves many small institutions (who probably sold them a good portion of the $19 billion in bad loans) scratching their heads, wondering why they’re still around while companies like IndyMac, Lehman, Merrill, and Bear are all gone.

Also to note once again Countrywide and WAMU were the two biggest "pushers" of those now infamous OPTION ARM LOANS that have wrecked havoc on America. Shame on everyone from top to bottom that did not see this coming.

A few weeks ago, Countrywide (with everyone still wondering if BofA will stand behind their debt) was in the news saying that as many as two million Countrywide customers may have had their personal information, include Social Security numbers, stolen by a Countrywide employee – to sell to mortgage brokers! Countrywide has sent letters to customers notifying them of the breach. Right, and some of us are still waiting to hear about this altogether. The company is offering two years of free credit monitoring. Thank you.

Speaking of volatile rates, an Italian walked into a bank in New York City and asked for the loan officer. He needed to borrow $5,000 for two weeks, but he was not a depositor of the bank. The loan officer said that the bank would need some form of security for the loan, so the Italian handed over the keys to a new $250,000 Ferrari out front and they could hold it until the loan was paid off in two weeks. The title was produced and everything checked out, the car was driven into the bank's underground garage and parked, and the loan granted at 12%.
Later, the bank's president and officers all enjoyed a good laugh on the Italian for using a $250,000 Ferrari as collateral for a $5,000 loan.

Two weeks later, the Italian returned, repaid the $5,000 plus interest of $23.07. The loan officer said, “Sir, we are very happy to have had your business, and this transaction has worked out very nicely, but we are a little puzzled. While you were away, we checked you out and found that you are a multimillionaire. What puzzles us is, why would you bother to borrow $5,000?”
The Italian replied: “Where else in New York City can I park my car for two weeks for only $23.07 and expect it to be there when I return?”