When I visited Seattle earlier this year, I walked past Washington Mutual's former headquarters. If I had stopped ten people on the street that day, and asked them about WaMu, they might have suspected I was inquiring about an exotic pharmaceutical substance.
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| WaMu's ad campaign slogan, circa 2008 |
Ah, how quickly we forget the good old days of mortgage fraud, of which
Washington Mutual was a major player. Just to refresh your memory, it was a half-decade ago when the housing market was characterized as "frothy," when the Liars Club known as the National Association of Realtors described annual housing price increases as "inevitable," and when wink-and-nod mortgage applications were disturbingly routine. As we now know, the housing market of cards collapsed under the weight of its own corruption. The WaMu bank failure was arguably the greatest single bank failure in American history.We also know very, very few people -- and no principal perpetrators of the disaster -- were brought to justice.
Recently, a WaMu sales executive, working at the bank's subprime lending unit Long Beach Mortgage, took the fall for fraud. According to the Seattle Times, this was not an easy prosecutorial feat. "It took," the paper reported, "four years, two trials, and one unsuccessful prosecutorial appeal to a higher court" to finally nail the crooked suit.
The corruption, of course, went far further than one fallen angel. As the
Seattle Times story noted, "In one WaMu email cited by U.S. Sen. Carl Levin, D-Mich., an internal 2005 audit found that 83 percent of loans approved by the bank's Montebello, Calif. office were fraudulent." WaMu's senior management remains free to this day. They had no idea there was gambling going on in the casino. Sure.
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