Washington Mutual's New Strategy Raises Credit Risk

Published on:
8 December 2006 at 06:33 a.m. ET

Written by: Unknown Author –

http://www.insidearm.com/news/00010781-washington-mutuals-new-strategy-raises-cr/

by Mike Bevel, CollectionIndustry.com

Perennial lay-offer and outsourcer Washington Mutual has a new bag: trading interest rate risk for too much credit risk. Or, at least, that?s what industry insiders and critics of the bank are suggesting.

Washington Mutual has moved further away from making government-insured and fixed-rate home loans, going instead with what it calls ?higher-margin? products: option adjustable-rate mortgages, home-equity loans, and subprime mortgages, to name a few.

You can read the full story about WaMu?s new strategy at WaMu’s new strategy raises credit risk.