Inner City Press/FFW: Watchdogging and Taking Action Since 1987

Updated August 23, 2010  - For further information, click here to contact us

Update of August 23, 2010: Who knew - the FDIC has continued to extend “final settlement” of JPMorgan Chase's sweetheart deal to buy Washington Mutual, most recently to August 30, 2010, see document here. While those most interested as seeking a higher price from Morgan Chase, could there be CRA and anti-predatory lending possibilities?

Update of November 10, 2008:  So how many WaMu branches is JPMorgan Chase planning to close? The bank refuses to say, but we aim to find out...

September 29, 2008: ...When Inner City Press / Fair Finance Watch complained to the Office of Thrift Supervision about the subprime practices of Washington Mutual's affiliate Long Beach Mortgage, the OTS responded that is was only concerned with WaMu's savings bank, not its finance company. WaMu never got CRA credit for Long Beach's loans, but now WaMu has failed and been bought at fire sale prices by bottom-feeder JPMorgan Chase...

Update of September 22, 2008: How did Citigroup slip the bit? Now they're listed as a possible bidder for WaMu...

Update of April 7, 2008: In the first study of the just-released 2007 mortgage lending data, Inner City Press / Fair Finance Watch finds that Washington Mutual in 2007 confined African Americans to higher-cost loans above this rate spread 2.05 times more frequently than whites. Fully of 54,914 WaMu's 261,476 mortgages in 2007, or 21%, were high cost loans over the rate spread. 

Update of January 14, 2008: There's been a story that Washington Mutual had exploratory merger talks with JP Morgan Chase, since WaMu's subprime lending has gotten it into such financial straits. A follow-up article said that JPM Chase-WaMu would still be below the 10% nationwide deposit cap.

Update of May 21, 2007:  From a report last week, 2006 subprime mortgage volume and status of Washington Mutual  $26,837  Some buyback woes, layoffs, rising delinquencies.

Update of April 30, 2007: It was reported last week that WaMu's subprime mortgage lending in 2006 was $26.8 billion...

Update of April 24, 2006: Inner City Press / Fair Finance Watch has conducted a comparative study of 2005 Home Mortgage Disclosure Act data, this time focused on New York City, and has found that in NYC in 2005 Washington Mutual and its higher-cost affiliate, Long Beach Mortgage, together confined their borrowers in The Bronx to higher-cost loans above this rate spread over 35 times more frequently than whites, worse than their record in 2004...

Update of April 10, 2006: The 2005 Home Mortgage Disclosure Act data, which Inner City Press / Fair Finance Watch received in late March from Washington Mutual, reveal that in 2005 Washington Mutual and its higher-cost affiliate, Long Beach Mortgage together confined African Americans to rate spread loans 3.70 times more frequently than whites.  The Federal Reserve has defined higher-cost loans as those loans with annual percentage rates above the rate spread of three percent over the yield on Treasury securities of comparable duration on first lien loans, five percent on subordinate liens. While comprehensive income comparisons will not be possible until the aggregate data is released in September, ICP / Fair Finance Watch has designed an innovative way to consider income correlations, by calculating upper and lower income tranches based on each lenders own customers. Nationwide at Washington Mutual for conventional first-lien loans, upper income African Americans were confined to higher cost loans over the rate spread 4.19 times more frequently than whites. Income does not explain the disparities at Washington Mutual. Developing...

Update of November 28, 2005:  And now you know:  the fall-out since WaMu bought Providian includes cutting as many as 371 jobs by closing a Providian call center in El Paso, Texas. The layoffs were tersely described in a November 17 letter to the Texas Workforce Commission under the Workers Adjustment and Retraining Notification Act.  Of course, neither these layoffs nor other impacts were disclosed while WaMu’s application was before the Office of Thrift Supervision…

Update of September 26, 2005: Inner City Press / Fair Finance Watch has reviewed, using the SPSS program (Statistical Package for the Social Sciences) the mortgage records, in the New Orleans Metropolitan Statistical Area, of  Washington Mutual, including not only denial rates but also the new information concerning which loans are subject to a rate spread (3% higher than comparable Treasuries on a first lien, and 5% on a subordinated lien) --

Whites: 992 applications, leading to 189 denials (19.05% denied) and 669 originations; 84 [or 12.56%] exceeded rate spread.

African Americans: 476 applications, leading to 155 denials (32.56% denied, 1.71 times higher than whites) and 243 originations; 81 [or 33.33 percent] exceeded rate spread [2.65 times higher / more likely to be over rate spread than whites].

Latinos: 121 applications, leading to 25 denials (20.66% denied, 1.08 times higher than whites) and 81 originations; 14 [or 17.28 percent] exceeded rate spread [1.38 times higher / more likely to be over rate spread than whites].

Update of September 5, 2005: In Alabama, over 54% of Washington Mutual's loans to African Americans in 2004 were higher-cost, compared to 20.5% of WaMu's loans to whites: a disparity of 2.63. Click here for more of ICP’s Gulf Coast Watch.

Update of August 8, 2005: In its second response to Inner City Press / Fair Finance Watch’s comments, Washington Mutual has this to say: “since minorities make up a larger percentage of the subprime lending pool, it is statistically inevitable that combining the threshold loan rates of a prime lender and a subprime lender will result in a higher threshold loan rate for minorities than for white borrowers. While this is a socially troubling result that Applicant continues to attempt to address through innovative lending programs, the OTS should not allow ICP to use the pending application as a forum for protesting broader social issues.”

          But the disparities ICP has identified are not “societal,” but at Washington Mutual and its subprime unit Long Beach.  And if regulators were to agree with WaMu’s argument, that each affiliates’ lending must be considered separately, conglomerates could run rings around the fair lending laws by simply confining most people of color into separate subsidiaries (not unlike what happens at Washington Mutual / Long Beach)...

Update of August 1, 2005: Washington Mutual last week submitted to the Office of Thrift Supervision a purported response to Inner City Press / Fair Finance Watch’s two timely comments opposing WaMu’s applications to acquire Providian.  Washington Mutual’s response tries to obscure the striking disparities in its lending -- in which African Americans and Latinos are subjected to higher cost “rate spread” loans significantly more than whites, and more than at WaMu’s peers -- by arguing that the OTS should only consider the records of WaMu’s thrift(s) and “Bank Affiliates.”  But this is a ludicrous argument.  Simply as one example, even the Federal Reserve considers (and has fined) Citigroup’s non-bank subprime lending units, because they are bank holding company subsidiaries, just as WaMu’s subprime unit Long Beach is a thrift holding company subsidiary.  

            WaMu also chides ICP for “aggregat[ing] loans with 1^st and 2^nd lien reportable spreads” -- that is, for not separately considering First Liens and Subordinated Liens.  Well, ICP has reviewed WaMu’s 2004 data, and for the important category of first liens finds WaMu’s record is even more disparate:

Washington Mutual, for First Liens in 2004

Whites: 399,515 originations; 14,459 [or 3.62 percent] exceeded rate spread (of 3% on a first lien, 5% on a subordinate lien)

African Americans: 36,375 originations; 5,795 [or 15.93 percent] exceeded rate spread, fully 4.4 times higher / more likely to be over rate spread than whites.

Latinos: 74,371 originations; 4,079 [or 5.48 percent] exceeded rate spread [1.51 times higher / more likely to be over rate spread than whites]

            Rather than substantively respond to what ICP has raised, WaMu seeks to evade the issues by calling the 2004 data it provided to ICP “preliminary.”   WaMu sent ICP (and presumably others) a correction, restating the number of HOEPA loans, and said that was the only correction. So why call the data “preliminary”? Why not respond in some fashion to the consumer complaints ICP has submitted including a detailed complaint from a deeply dissatisfied WaMu customer over 85 years old?  ICP has now submitted additional sample complaints, including for example one that begins “I am writing this letter concerning a fraud I believe is being perpetrated by Washington Mutual Bank against my family,” and a letter from the Kentucky Attorney General’s Office telling a consumer that “this office has contacted Washington Mutual on several occasions in an attempt to resolve your complaint. As of this date, they have sent correspondence indicating their intent to respond, but no response has been received” -- rather like in this proposed merger proceeding. ICP has reiterated its request for public hearings and denial of WaMu’s applications.

Update of July 25, 2005:  Beyond its subprime Long Beach, WaMu buys subprime loans by others. From among the complaints against Ameriquest that Inner City Press has received, this statement by Ameriquest itself: “Ameriquest is affiliated with the originating lender, Town and Country Credit Corporation. Ameriquest also serviced the loan from origination to August 23, 2002, when the loan was sold, servicing request, to Washington Mutual. Accordingly, Ameriquest filed the response regarding the origination issued on behalf of our affiliate and the investor.”  So Washington Mutual buy (“invests in”) Ameriquest loans...

On July 18, Inner City Press / Fair Finance Watch filed a second comment with the Office of Thrift Supervision on Washington Mutual’s proposal to acquire Providian.

Office of Thrift Supervision
Attn: Acting Director Richard M. Riccobono, et al.
1700 G Street, N.W., Washington, DC 20552

OTS - West Regional Office
Regional Director Michael Finn, et al.

Re:        ICP’s SECOND COMMENT AND REQUEST FOR HEARINGS ON         WASHINGTON MUTUAL’S PROPOSAL TO ACQUIRE PROVIDIAN

Dear Acting Director Riccobono, Mr. Albinson and others at the OTS:

            On behalf of Inner City Press/Community on the Move and its members and affiliates, and the Fair Finance Watch (collectively, “ICP”), this is a second comment opposing, requesting public hearings on and the improperly withheld portions of the applications related to the proposal, announced by Washington Mutual (“WaMu”) on June 6, 2005, to acquire Providian Financial Corporation and its affiliates, including Providian National Bank (collectively, “Providian").

            As set forth below, in the state of New York in 2004, Washington Mutual confined African Americans to higher cost rate spread loans 3.20 times more frequently than whites, and confined Latinos to higher cost rate spread loans 2.76 times more frequently than whites.  In California in 2004, Washington Mutual confined African Americans to higher cost rate spread loans 2.37 times more frequently than whites, and confined Latinos to higher cost rate spread loans 2.17 times more frequently than whites. In the state of Washington in 2004, Washington Mutual confined African Americans to higher cost rate spread loans 3.12 times more frequently than whites, and confined Latinos to higher cost rate spread loans 2.80 times more frequently than whites. In Delaware in 2004,    Washington Mutual confined African Americans to higher cost rate spread loans 3.99 times more frequently than whites, and confined Latinos to higher cost rate spread loans 3.27 times more frequently than whites. Also analyzed below are WaMu’s disparities in the sample states of  New Jersey, North Carolina, Illinois, Pennsylvania, Texas, Connecticut, Ohio and Tennessee. These disparities militate for the public hearings ICP has timely requested.

            ICP submitted a first comment on June 20, 2005, to which WaMu has yet to respond. As set forth below, as soon as ICP saw notice of the filing of the application, ICP submitted a request under the Freedom of Information Act (5 U.S.C. § 552; “FOIA”) for the application.  Under cover letter dated July 12, 2005, the OTS has provided ICP only with the portions of the application for which WaMu has not requested confidential treatment.  While the comment period is slated to close on August 1, the OTS has withheld such presumptively non-exempt portions of the Application as “Subsidiaries of PNBank” (Exhibit 5), and even “List of Directors of Officers” (Exhibit 9). 

            For the reasons set forth in ICP’s just-filed FOIA appeal, the list of and information about the directors and officers of WaMu must be made public, both so that ICP and others can comment on managerial issues under HOLA, and because this information is, in most cases, already publicly available. In fact, information about WaMu’s directors, including their other holdings, was released by the OTS during the WaMu - Dime Savings proceeding in 2001, as was information about the subsidiaries of the target (in that case, Dime Savings). So to now withhold it in full ignores not only FOIA precedents generally, but also the OTS’ own precedents.

            ICP’s initial submission focused nationwide on the glaring disparities in Washington Mutual’s mortgage lending record in 2004, based on HMDA data ICP was given by Washington Mutual.  Particularly troubling is the degree to which Washington Mutual disproportionately confines African Americans and Latinos to higher cost, “rate spread” mortgages.  For example, Washington Mutual nationwide in 2004 imposed higher-cost rate spread loans 3.26 times more frequently on African Americans than on whites. This is significantly more disparate than Washington Mutual’s peers.

   Below, ICP submits for the record, and in support of its request for public hearings, state-by state analysis of Washington Mutual’s lending in 2004, by race, ethnicity and gender, in the sample states of New York, New Jersey, North Carolina, California, Illinois, Pennsylvania, Texas, Washington, Connecticut, Delaware, Ohio and Tennessee. These disparities militate for the public hearings ICP has timely requested.

NEW YORK: Washington Mutual's lending in the state of NY in 2004

Whites: 30,081 applications, leading to 7553 denials (25.11% denied) and 19183 originations; 504 [or 2.63 percent] exceeded rate spread (of 3% on a first lien, 5% on a subordinate lien)

African Americans: 5962 applications, leading to 2265 denials (37.99% denied, 1.51 times higher than whites) and 2980 originations; 251 [or 8.42 percent] exceeded rate spread, fully 3.20 times higher / more likely to be over rate spread than whites.

Latinos: 5053 applications, leading to 1738 denials (34.40% denied, 1.37 times higher than whites) 2684 originations; 195 [or 7.27 percent] exceeded rate spread [2.76 times higher / more likely to be over rate spread than whites]

NEW JERSEY: disparities in WaMu's lending in New Jersey in 2004

Whites: 21,663 applications, leading to 4681 denials (21.61% denied) and 14,519 originations; 426 [or 2.93 percent] exceeded rate spread (of 3% on a first lien, 5% on a subordinate lien)

African Americans: 2702 applications, leading to 893 denials (33.05% denied, 1.53 times higher than whites) and 1491 originations; 180 [or 12.07 percent] exceeded rate spread [a whopping 4.12 times higher / more likely to be over rate spread than whites]

Latinos: 3750 applications, leading to 1122 denials (29.92% denied, 1.38 times higher than whites) 2167 originations; 160 [or 7.38 percent] exceeded rate spread [2.52 times higher / more likely to be over rate spread than whites]

North Carolina: Washington Mutual's lending in the state of NC in 2004

Whites: 6573 applications, leading to 1593 denials (24.24% denied) and 4464 originations; 469 [or 6.40 percent] exceeded rate spread (of 3% on a first lien, 5% on a subordinate lien)

African Americans: 1995 applications, leading to 699 denials (35.04% denied, 1.45 times higher than whites) and 1153 originations; 487 [or 42.24 percent] exceeded rate spread [a whopping 4.02 times higher / more likely to be over rate spread than whites]

Latinos: 353 applications, leading to 116 denials (32.86% denied, 1.36 times higher than whites) 20 originations; 44 [or 21.15 percent] exceeded rate spread [2.01 times higher / more likely to be over rate spread than whites]

California: Washington Mutual's lending in CA in 2004, by race and ethnicity

Whites: 184,107 applications, leading to 32,820 denials (17,83% denied) and 130,593 originations; 5932 [or 4.54 percent] exceeded rate spread (of 3% on a first lien, 5% on a subordinate lien)

African Americans: 12,307 applications, leading to 3533 denials (28.71% denied, 1.61 times higher than whites) and 7639 originations; 821 [or 10.75 percent] exceeded rate spread [2.37 times higher / more likely to be over rate spread than whites]

Latinos: 72,320 applications, leading to 18,227 denials (25.20% denied, 1.41 times higher than whites); 47,043 originations; 4629 [or 9,84 percent] exceeded rate spread [2.17 times higher / more likely to be over rate spread than whites]

Illinois: Washington Mutual's lending in IL in 2004, by race and ethnicity

Whites: 33,424 applications, leading to 6066 denials (18.15% denied) and 22,793 originations; 1423 [or 6.24 percent] exceeded rate spread (of 3% on a first lien, 5% on a subordinate lien)

African Americans: 6009 applications, leading to 1829 denials (30.44% denied, 1.68 times higher than whites) and 3470 originations; 949 [or 27.35 percent] exceeded rate spread [a whopping 4.38 times higher / more likely to be over rate spread than whites]

Latinos: 7594 applications, leading to 1781 denials (23.45% denied, 1.29 times higher than whites); 4495 originations; 680 [or 15.13 percent] exceeded rate spread [2.42 times higher / more likely to be over rate spread than whites]

Pennsylvania: Washington Mutual's lending in PA in 2004, by race and ethnicity

  Whites: 13,493 applications, leading to 2663 denials (19.74% denied) and 9114 originations; 538 [or 5.90 percent] exceeded rate spread (of 3% on a first lien, 5% on a subordinate lien)

African Americans: 1381 applications, leading to 404 denials (29.25% denied, 1.48 times higher than whites) and 799 originations; 147 [or 18.40 percent] exceeded rate spread [fully 3.12 times higher / more likely to be over rate spread than whites]

Latinos: 621 applications, leading to 182 denials (29.31% denied, 1.48 times higher than whites); 359 originations; 48 [or 13.37 percent] exceeded rate spread [2.27 times higher / more likely to be over rate spread than whites]

Texas: Washington Mutual's lending in TX in 2004, by race and ethnicity

Whites: 38,578 applications, leading to 11,751 denials (30.46% denied) and 22,036 originations; 3049 [or 13.84 percent] exceeded rate spread (of 3% on a first lien, 5% on a subordinate lien)

African Americans: 5952 applications, leading to 2566 denials (43.11% denied, 1.42 times higher than whites) and 2802 originations; 798 [or 28.48 percent] exceeded rate spread [2.06 times higher / more likely to be over rate spread than whites]

Latinos: 13,583 applications, leading to 5598 denials (41.21% denied, 1.35 times higher than whites) and 6376 originations; 1631 [or 25.58 percent] exceeded rate spread [1.85 times higher / more likely to be over rate spread than whites]

Washington: Washington Mutual's lending in the state of WA in 2004

Whites: 33,325 applications, leading to 5686 denials (17.06% denied) and 24,468 originations; 1290 [or 5.27 percent] exceeded rate spread (of 3% on a first lien, 5% on a subordinate lien)

African Americans: 933 applications, leading to 250 denials (26.80% denied, 1.57 times higher than whites) and 609 originations; 100 [or 16.42 percent] exceeded rate spread [fully 3.12 times higher / more likely to be over rate spread than whites]

Latinos: 1677 applications, leading to 433 denials (25.82% denied, 1.51 times higher than whites) and 1111 originations; 164 [or 14.76 percent] exceeded rate spread [fully 2.80 times higher / more likely to be over rate spread than whites]

Connecticut:  Washington Mutual's lending in CT in 2004, by race and ethnicity

Whites: 10,137 applications, leading to 1849 denials (18.24% denied) and 7143 originations; 236 [or 3.30 percent] exceeded rate spread (of 3% on a first lien, 5% on a subordinate lien)

African Americans: 815 applications, leading to 266 denials (32.64% denied, 1.79 times higher than whites) and 447 originations; 64 [or 14.32 percent] exceeded rate spread [a whopping 4.34 times higher / more likely to be over rate spread than whites]

Latinos: 932 applications, leading to 283 denials (30.36% denied, 1.66 times higher than whites) and 560 originations; 63 [or 11.25 percent] exceeded rate spread [fully 3.41 times higher / more likely to be over rate spread than whites]

            In the state of Delaware in 2004, Washington Mutual confined African Americans to higher cost rate spread loans 3.99 times more frequently than whites, and confined Latinos to higher cost rate spread loans 3.27 times more frequently than whites.

            In Ohio in 2004, Washington Mutual confined African Americans to higher cost rate spread loans 3.18 times more frequently than whites. In Tennessee in 2004, Washington Mutual confined African Americans to higher cost rate spread loans 3.05 times more frequently than whites. These disparities militate for the public hearings ICP has timely requested.

          The OTS has also received into the record, as exhibits to ICP’s initial comment, sample consumer complaints against Washington Mutual Home Loans and Washington Mutual Bank. ICP is annexing hereto some complaints that have been directed to ICP since ICP filed its initial comment on June 20, 2005. For example, ICP has received, and herewith submits, a letter dated June 22, 2005, providing a detailed complaint and documentation about a mishandled joint annuity account for a senior citizen, who writes that in WaMu’s annexed response, “Paragraph II is false... Paragraph III is false... Compliance specialists have been of no help. I am a World War II veteran and I’m 86 years old, was married and had two children. I didn’t serve my country for the disrespect I’ve had from Washington Mutual, in its deliberate changing and cover up of legal documents.”   See attached -- and act on.

  Also annexed is a July 2, 2005, complaint to ICP (and an AG) that “in two years, Washington Mutual, who had bought my mortgage from Great Western, ruined my credit, mis-applied my payments and made my life a living hell while they at WM totally ignored every phone call, letter (360 of them) and visits to their loan center.” This consumer, 76 years old, asserts that the OTS protects Washington Mutual. The issues raised into the record in this proceeding should be fully and publicly addressed, including at the public hearings ICP has timely requested.

More needs to be (and will be) said, but ICP will await the applications (as soon as they are filed), along with copies of the OTS's correspondence with and about Washington Mutual and/or Providian, and the banks' responses. As set forth above, the improperly withheld information must be released, and it is imperative that the comment period on WaMu-Providian be extended until the information is released and can be commented on

         As to Exemption 4, consider the Applicant was / would have been required to provide the OTS with this information, in order to become a thrift holding company. Therefore, this information must be disclosed under FOIA unless such disclosure would:   (1) impair the OTS's ability to obtain necessary information in the future; or (2) cause substantial harm to the Applicant’s competitive position.  Since neither of these two tests can be met, the withheld information must be released.

Since the Applicant was, in context, "obliged" to provide the OTS with the information contained in these Exhibits, that information can only be withheld if disclosure would likely:  "(1) impair the Government's ability to obtain necessary information in the future; or (2) cause substantial harm to the competitive position of the person from whom the information was obtained."  Critical Mass Energy Project v. Nuclear Regulatory Comm'n, 975 F.2d 871, 878, 880 (D.C. Cir. 1992); National Parks and Conservation Ass'n v. Morton, 498 F.2d 765, 770 (D.C. Cir. 1974).  [further legal argument omitted in this format]

            The improperly withheld records must be released. We are hereby requesting that the comment period be open until at least three business days after we receive the improperly withheld records responsive to our timely FOIA request.

            For the reasons set forth in the attached, the OTS should schedule the requested evidentiary hearings. On the current record, the OTS should deny this proposal.

If you have any questions, please immediately telephone the undersigned, at (718) 716-3540.

Very Truly Yours,

Matthew Lee, Esq.

Executive Director -- further information, click here to contact us

Update of July 11, 2005:  WaMu quietly, just before the 4^th of July weekend, submitted its application to acquire Providian. The notice, on the OTS’ web site, runs like this:

08551        * DELEGATED      WEST        R5-2005-0098      Washington Mutual Bank
Washington Mutual Bank      MERGER       06/30/2005     
400 E. Main Street      VOLUNTARY       09/28/2005      Stockton, CA
Stockton, CA 95290     ACQ A NON-OTS NOT AN S&L      R0-0000-0000   IN PROCESS

  Inner City Press has submitted a request under the Freedom of Information Act for the application, the specifics of which will be reported in this space.

Update of July 5, 2005: Playing for that corporate welfare, WaMu demanded and got major tax breaks to open a back-office in San Antonio: "Several factors led to our selection of San Antonio," WaMu Chief Administrative Officer Benson Porter said.  Porter cited a $15 million grant from the state-backed Texas Enterprise Fund as a main reason the firm located in Texas. City and county leaders also kicked in 10-year tax abatements.   Then there’s WaMu’s Long Beach’s disparate loans in Texas, to be detailed to the Office of Thrift Supervision as soon as WaMu submits its Providian application.

Update of June 27, 2005:  Last week WaMu added to its board of directors Charles Lillis.   In this era of supposed focus on good corporate governance, talk about interlocking boards and being over-extended:  “In addition to SomaLogic, Inc., Dr. Lillis serves on the boards of several public and privately owned companies, including SuperValu Inc., the nation's 10th largest food retailer, Williams Companies, a leading producer and transporter of natural gas in the United States, and Charter Communications, a domestic cable television company. He is also co-founder and managing partner of LoneTree Capital, a private equity group that invests primarily in the communications/information industry.”   So will he have time to focus on the fair lending disparities at WaMu? 

Update of June 20, 2005: Inner City Press / Fair Finance Watch (ICP) has just filed a 20-page challenge to the application by Washington Mutual to acquire Providian Financial Corporation.  ICP's comment, filed under the Community Reinvestment Act with the Office of Thrift Supervision’s offices in Washington, San Francisco and Seattle, is based on the striking lending disparities in the 2004 mortgage data of Washington Mutual and its higher-cost subprime lender, Long Beach, and on Providian’s history of problematic credit card lending. Nationwide, Washington Mutual in 2004 imposed higher-cost rate spread loans 3.26 times more frequently on African Americans than on whites. This is significantly more disparate than Washington Mutual’s peers.  ICP has also submitted sample consumer complaints against Washington Mutual obtained from state Attorneys General.

                ICP has analyzed Washington Mutual’s 2004 lending by originations and by which loans are at or over the Federally-defined rate spread (3% higher than comparable Treasuries on a first lien, and 5% on a subordinated lien) and has found the following, nationwide:

Whites: 428,973 originations; 27,455 [or 6.40 percent] exceeded rate spread

African Americans: 40,586  originations; 8472 [or 20.87 percent] exceeded rate spread [3.26 times higher / more likely to be over rate spread than whites]

Latinos: 75,450 originations; 10,000 [or 13.25 percent] exceeded rate spread [2.07 times higher / more likely to be over rate spread than whites]

Washington Mutual’s nationwide lending in 2004 by gender

            At Washington Mutual, African American men were confined to high cost loans 3.34 times more frequently than white men; Hispanic women were confined to high cost loans 2.53 times more frequently than white men -- the largest disparity for this comparison among the large lenders reviewed. Without regard to race, women were confined to high cost loans  1.48 times more frequently than men at Washington Mutual in 2004.

            In the New York City MSA (where WaMu swallowed Dime Savings Bank), at Washington Mutual in 2004 African Americans borrowers were 3.68 times more likely to receive a rate spread loan than white borrowers. Washington Mutual denied the applications of African Americans 1.51 times more frequently than those of whites. Washington Mutual’s rate spread disparity for Latinos was 3.09; Washington Mutual denied the applications of Latinos 1.33 times more frequently than those of whites.

Washington Mutual in the Washington DC MSA in 2004:

Whites: 7640 applications, leading to 1149 denials (15.04% denied) and 5593 originations; 332 [or 5.94%] exceeded rate spread.
African Americans: 3779 applications, leading to 931 denials (24.64% denied, 1.64 times higher than whites) and 2278 originations; 196 [or 8.60 percent] exceeded rate spread [1.45 times higher / more likely to be over rate spread than whites].

Hispanics: 1555 applications, leading to 260 denials (16.72% denied, 1.11 times higher than whites) and 1145 originations; 185 [or 16.16 percent] exceeded rate spread [2.72 times higher / more likely to be over rate spread than whites -- the most disparate in this category of the five largest lenders, reviewed by ICP.

Washington Mutual’s 2004 mortgage lending in Florida

Whites: 57,276 applications, leading to 12,540 denials (21.89% denied) and 37,986 originations; 2785 [or 7.33%] exceeded rate spread.
African Americans: 6882 applications, leading to 2506 denials (36.41% denied, 1.66 times higher than whites) and 3600 originations; 710 [or 19.72 percent] exceeded rate spread [2.69 times higher / more likely to be over rate spread than whites].

Latinos: 19,300 applications, leading to 5101 denials (26.43% denied, 1.21 times higher than whites) and 11,932 originations; 1462 [or 12.25 percent] exceeded rate spread [1.67 times higher / more likely to be over rate spread than whites].

State By State

       Inner City Press / Fair Finance Watch reviewed, using the SPSS program (Statistical Package for the Social Sciences) the mortgage records of the consolidated Washington Mutual in more than a dozen states, by originations and which loans are subject to a rate spread (3% higher than comparable Treasuries on a first lien, and 5% on a subordinated lien) --

            Orig     Rate

State              Spread      %

AK        340       158    46.47%

OK      1268      410    32.33%

NE       1084      340    31.37%
WY        217         68    31.34%

AL       2096       594    28.34%

LA       2410      523    21.70%

AR       1660      350    21.08%

TN       4480       908    20.27%

IA         1366        275  20.13%

WV        426         73    17.14%

NC     6475     1047     16.17%

SC       2279      352    15.45%

NM      1552      224    14.43%

MO      4200      590    14.05%
TX     32,321   4355     13.47%

IN         3751       491    13.09%

WI       3441      445    12.93%

GA  11,668      1489    12.76%
KY      2374      249    10.49%
OH      8226      863    10.49%
MI   12,977      1351    10.41%
ND        375         39    10.40%

CO   18,229    1876     10.29%

UT       5759      510      8.86%

IL      30,763    2580       8.39%

ME        535         44      8.22%

MD      9994      799      7.99%

FL     47,446    3742       7.89%

SD         445         31      6.97%

PA   11,968       807      6.74%

RI         1605       105      6.54%

OR    14,011      825      5.89%

VA    10,319      533      5.17%

KS       1115        56      5.02%

WA     33,794  1622       4.80%

MN      6293      289      4.59%

DC       1382        62         4.49%

CA  203,392    9110         4.48%

MT        910         39        4.29%

AZ    11,599      472        4.07%

NJ    20,123       784        3.90%

CT       9410       365        3.88%

NH      1924        67        3.48%

NV      8783      291        3.31%

MA    13,461     395        2.93%

ID         2078         53        2.55%

VT         293           7        2.39%

HI         2699         44      1.63%

MS            1      none     0.00% -- Stopped originating after predatory lending verdict against Washington Mutual Finance Group, subsequently sold to Citigroup

            ICP has also submitted sample consumer complaints against Washington Mutual obtained from the Attorneys General of Missouri and Ohio. ICP has submitted filings and requests to other states’ attorneys generals, including New York’s. While WaMu has confirmed receiving requests for information from the New York AG, it’s worth noting that the Office of the Comptroller of the Currency’s and the Clearing House’s lawsuits last week against the NY AG would not block any scrutiny of Washington Mutual.

            ICP has submitted a list of complaints against not only Washington Mutual Finance but also Washington Mutual Home Loans and Washington Mutual Bank, from the sample state of Ohio. Here are quotes from some recent complaints against Washington Mutual from the sample state of Missouri:

“Cons[umer] refinanced and co[mpany] mistakenly issued her an escrow refund check. Consumer later had to pay taxes and penalties out of her pocket...”

Consumer states that Washington Mutual erroneously told her no payment was due for December and sent a statement to that effect. Then consumer received statement showing her past due. Company admits error but says she still had to make her payment. Consumer disagrees.

Washington Mutual is foreclosing on house thought consumer has sold the house and has the money to pay the company.

Consumer was supposed to receive a refund on taxes paid through escrow account.

Consumer states that the loan on her house was with Homeside Lending until January 2003. Consumer refinanced and learned that Homeside Lending had become a part of Washington Mutual. Consumer was to receive an escrow check for an amount over $1000. Washington Mutual sent consumer one escrow check for $1,003.23 but when consumer tried to deposit it, it was shown with a stop payment....

Mortgage was paid but Washington Mutual hasn’t removed lien.

Consumer sent one check for three payments but Washington Mutual applied additional amount to principal. Consumer has tried to get company to fix error, but has gotten no response. Now Washington Mutual shows consumer past due.

Consumer’s finance rates wasn’t what she and Washington Mutual had agreed upon.  Consumer wants her non-refundable deposit back but Washington Mutual refuses.

Consumers changed their property insurance and notified mortgage company to change amount to be put in their escrow account. Due to an error on Washington Mutual’s part, amounts paid were put in a ‘holding account’ until adjustment was made. This resulted in late payments being posted to consumers’ credit rating. Washington Mutual will not correct the situation after repeated requests by consumers.

Consumer wants to make Attorney General aware of Washington Mutual’s practice: Consumer had her home mortgage with Washington Mutual and paid her real estate taxes with her monthly payment. Money was put in escrow for taxes but Washington Mutual failed to pay taxes at the end of the year as required and it took consumer over seven months and a private attorney to finally get Washington Mutual to pay the taxes.

Consumer refinanced two home loans and paid Washington Mutual via wire transfer and then Washington Mutual automatically withdrew the payments too. Washington Mutual refunded his money but it took 40 days and he wants them to pay him the same interest they would have charged him.

Consumer was told one price of closing on a lower mortgage rate over the phone and gave credit card number to secure lower rate. When consumer received the paperwork he found that the costs were higher than promised.

Consumer wanted to make payment arrangement with Washington Mutual but house was foreclosed on before she could. Consumer wants home back because she says Washington Mutual didn’t even provide the amount needed before the repo took place.

...Washington Mutual sent consumer a letter regarding a foreclosure. Consumer called and Washington Mutual admitted they had made an error. Now the foreclosure is appearing on consumer’s credit report -- this is causing problems with refinancing

Consumer was supposed to get a loan with Washington Mutual but the company kept changing the interest rate. Consumer has paid for an appraisal but has not closed on the loan because interest rate continues to change. Consumer wants his loan papers returned.

“Consumer is upset because Washington Mutual has more than doubled their monthly payment amount for a loan. Consumer lives on a fixed income. [Complaint of May 5, 2005].

            Beyond these consumer abuses, the $225 million break-up fee is abusive and cannot stand. Also, in early May 2005 the U.S. Labor Department ordered Washington Mutual to rehire an executive it fired last year after she complained of irregularities in its home-loan division. Theresa Hagman, 44 years old, worked at WaMu's office in Chatsworth, Calif., as vice president and national manager of the custom-home construction-loan disbursement center. In late 2003 she began to raise concerns to her direct supervisors and to other bank managers that WaMu might be violating federal regulatory requirements. And she got... fired. Even after the Labor Department ruling, WaMu remains defiant. "We strongly dispute the allegations by our former employee," said Alan Gulick, a Washington Mutual spokesman. "At the time the allegations were raised, we took them very seriously and began an immediate investigation." After reviews, he added, WaMu found no merit to them. The company may appeal the Labor Department's order, he said. ICP has requested public hearings primarily on Community Reinvestment Act and fair lending grounds, but also on the above.

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