WaMu Commits Another Billion To Help Borrowers While Ditching Neg-Ams

June 18, 2008 No Comments »

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Struggling thrift Washington Mutual said late today that it will pledge another $1 billion to help at-risk subprime borrowers avoid foreclosure.

WaMu has now put $3 billion towards the fund, which the company says has already assisted more than 7,500 homeowners since its launch in April 2007.

The program allows subprime borrowers who are current on their loans but facing a higher payment reset to apply for discounted fixed mortgages and other loan programs.

Those interested in the program can contact loan specialists at 800-881-7099 to inquire about all the details, and don’t worry, they won’t throw you into an option arm.

In the same announcement, WaMu said it was discontinuing all negative amortization loans and its WaMu Mortgage Plus program (which allowed borrowers to toggle between fixed and variable rates) in what it calls the company’s “retail-focused business strategy.”

Instead, the bank and mortgage lender will focus on four basic categories, including fixed-rate loans, hybrid adjustable-rate mortgages, interest-only ARMs, and home equity loans.

It’s looks like the ailing mortgage lender is striving to get back to the basics, after greatly reducing its home lending network late last year and recently shutting its wholesale division.

In related news, WaMu plans to layoff hundreds of their more than 45,000 employees nationwide tomorrow across all departments.

Shares of the Seattle-based savings and loan closed the day up 4 cents, or 0.64%, to $6.26, not far from their 52-week low (and 16-year low) of $5.75.

(photo: rbrwr)

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