As Expected, WaMu Posts Huge 1Q Loss

Hammered by rising residential loan delinquencies, Washington Mutual, the nation's sixth-largest originator, lost $1.14 billion in the first quarter, compared with a profit of $784 million in the same period a year ago. Over the past six months it has lost $2.3 billion. The Seattle-based WaMu, also the nation's largest thrift, is exiting the wholesale/broker channel and stopped funding subprime several months ago. A group of investors anchored by TPG Capital of Texas recently agreed to pump $7 billion of capital into WaMu by purchasing shares in the struggling company. In the first quarter it set aside $907 million to cover what it calls "increasing" subprime delinquencies. In the fourth quarter the provision was $511 million. WaMu originated just $13.77 billion of home loans in the first quarter, a stunning 66% decline from the volume in the first quarter of 2007.