JP Morgan Chase is in “advanced talks” to purchase struggling thrift and mortgage lender Washington Mutual, according to a report published today in the American Banker.
The publication said talks are “ongoing at the highest levels,” but stressed that no deal had been reached, and things could still fall through.
Washington Mutual has seen its share price fall more than 75 percent this year, making it a strong takeover candidate for a bank like Chase looking to expand its empire west.
In early January, CNBC noted that Chase was in “very preliminary talks” to acquire Washington Mutual, but at the time no deal was imminent.
It now appears as if things have heated up, given WaMu’s current point of no return.
Over the last year, the Seattle-based mortgage lender has halted wholesale lending, closed hundreds of stand alone retail home lending offices, depleted a $7 billion capital infusion, and cut thousands of jobs.
The company now expects it 2008 loan loss reserves to increase to $10.3 billion by the end of the third quarter thanks to ongoing mortgage losses.
Share of WaMu were up 20 cents, or 7.06%, to $3.03 in afternoon trading on Wall Street.