Washington Mutual Exec says Banks are in 'Very Difficult' Revenue Environment

by Patrick Lunsford, CollectionIndustry.com

Maybe he was just blurting craziness from his piehole, or maybe Washington Mutual?s chief operating officer, Steve Rotella, was being perfectly blunt in answering a question at Bank of America?s 36th Annual Investment Conference yesterday. Whatever the case, Rotella seems to think banks are in for some tough times trying to raise revenues.

Rotella, in fairness, was responding to a question asked about the current environment for bank revenues given the no-so-great climate of mortages. “It is a difficult environment right now, and we expect it to continue to be very difficult on the revenue side for everybody in the industry, and there will be continuing concerns across the industry for a time to come,” he responded.

Rotella, using numbers and facts, pointed out that the mortgage market in the U.S. has slipped from $3.3 trillion in recent years to $2.5 trillion this year. Begin pitying banks now for being able to fund only a paltry $2.5 TRILLION in mortgages.

Along with the rapid contraction of the market, Rotella pointed out that of that fat $3.3 trillion total, there is increased risk of mortgage default.