WaMu Lending Practices Were Laced With Fraud, Encouraged The Screwing Over Of Borrowers, Say Senate Investigators

In Washington, D.C., The Associated Press reports:

• The mortgage lending operations of Washington Mutual Inc., the biggest U.S. bank ever to fail, were threaded through with fraud, Senate investigators have found. And the bank's own probes failed to stem the deceptive practices, the investigators said in a report on the 2008 failure of WaMu.

• The panel said the bank's pay system rewarded loan officers for the volume and speed of the subprime mortgage loans they closed. Extra bonuses even went to loan officers who overcharged borrowers on their loans or levied stiff penalties for prepayment, according to the report being released Tuesday by the investigative panel of the Senate Homeland Security and Governmental Affairs Committee.

For more, see Investigation finds fraud in WaMu lending (Senate report: Failed bank’s own action couldn’t stop deceptive practices).

See also, The New York Times: Memos Show Risky Lending at WaMu.