WaMu Links 3Q Profit Decline to Refis

Washington Mutual Inc., Seattle, has reported earnings of $674 million ($0.76 per share) for the third quarter, down from $999 million ($1.09 per share) a year earlier, a decline it attributed partly to reduced mortgage refinancings.Net income for WaMu's mortgage banking segment totaled $271 million in the third quarter, up from $117 million a year earlier and from a loss of $63 million in the second quarter, the company said. Originations of home loans totaled $40.49 billion for the quarter, down from $111.95 billion a year earlier. However, WaMu touted the improved performance of its mortgage servicing rights, which rose $601 million from that of the second quarter "due to lower medium-term interest rates and a widening of the spread between mortgage rates and the rates on certain financial instruments the company uses to hedge the MSR risk." Loans held in portfolio rose by $11.62 billion from the second-quarter level due chiefly to "strong growth" in WaMu's home equity loans and lines of credit and short-term adjustable-rate mortgages, the company reported. WaMu can be found online at http://www.wamu.com.