WaMu Eliminates Option ARM, Other Changes

The below communication was internal to Washington Mutual originators outlining the changes the bank is making to help improve the quality of loans in Washington Mutual's portfolio and those that are pooled for sale.  Of primary import is the elimination of the Option ARM which WaMu originated relentlessly over the past several years.  In fact, while Countrywide rightfully catches the brunt of the Option ARM ire, WaMu was no saint either, with a massive amount of their quarterly "non-cash" profit booked from deferred interest associated with their Option ARM holdings. For them to go away from the Option ARM is an admission that the profits booked are not likely to be recognized and that they need to begin unwinding their profit and earnings from deferred interest originated by Op