From Drew DeSilver at the Seattle Times: Reckless strategies doomed WaMu
Here is a section on loose lending at WaMu:
“The big saying was ‘A skinny file is a good file,’ ” said Nancy Erken, a WaMu loan consultant in Seattle. She recalled helping credit-challenged borrowers collect canceled checks, explanatory letters and other documentation that they could afford their loans.
“I’d take the files over to the processing center in Bellevue and they’d tell me ‘Nancy, why do you have all this stuff in here? We’re just going to take this stuff and throw it out,’ ” she said.
In time, WaMu even began allowing low- or no-documentation option ARMs, piling risk on risk. The loose standards spread through the company like a flu virus.
File Under: doomed