WAMU: Lies, lies and damn lies
WAMU announced that they would be reserving $400M to cover defaulting loans. This is against a $290B loan portfolio.
Essentially, WAMU is foreseeing a default rate of 0.15%. Which is low considering their lending leadership in California.
Considering that $400M would cover 6,000 California homes and considering that 100,000 homes were headed for foreclosure in the first 6 months of 2007, I would say that WAMU is kidding themselves.
I expect that the loan reserves will increase to a total of $5B~$10B. But they will be increased each quarter in a trickle, so a to avoid a panic.
Essentially, WAMU is foreseeing a default rate of 0.15%. Which is low considering their lending leadership in California.
Considering that $400M would cover 6,000 California homes and considering that 100,000 homes were headed for foreclosure in the first 6 months of 2007, I would say that WAMU is kidding themselves.
I expect that the loan reserves will increase to a total of $5B~$10B. But they will be increased each quarter in a trickle, so a to avoid a panic.
posted by Andrew at
8:54 AM
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