News 3 – “Money troubles for Washington Mutual?”

http://www.kvbc.com/global/story.asp?s=9024664

Money troubles for Washington Mutual?

News 3 | September 17, 2008

Here in Nevada, we’ve seen some smaller banks swallowed up. But could it happen to some of the bigger names? News 3’s Gerard Ramalho answers questions surrounding Washington Mutual.

The banking industry as a whole has taken a hit – and that includes savings and loans.

It’s another familiar name in banking now rumored to be on the brink of collapse. Seattle-based Washington Mutual, better known as WaMu, has seen its shares plummet this year, down about 85 percent.

Some industry analysts say Washington Mutual, which has many branches here in Las Vegas, may be in trouble. The company itself, however, says investors need not to worry and that its customers are safe.

With a slogan that says, “Sit, bank…and relax,” some customers are finding that hard to do. Late Monday, WaMu’s stock rating was downgraded to “junk status,” with analysts specifically citing concerns over the bank’s mortgage division.

A WaMU spokesperson told News 3 Tuesday, “The company continues to be confident that it has sufficient liquidity and capital to support its operations while it returns to profitability.”

And with dozens of branches in the Las Vegas area, customers are being told not to worry.

“Two of my daughters work for Washington Mutual, and they said they’re fine – that people are coming in saying they’re closing, but they have to reassure them that they’re not,” says one Las Vegan.

As for rumors declaring that the bank is on the possible verge of bankruptcy, Washington Mutual says that’s not the case. The company claims, “Our bondholders and depositors are safe, and stock price alone doesn’t determine the strength of a company.”

For now, Washington Mutual remains the largest savings and loan bank in the entire country. WaMu stock closed Tuesday at about $2.30 per share.

In addition to the bankruptcy rumors floating around, the banking giant JP Morgan Chase may make an offer for the company.

None of this is substantiated, but is just more evidence that the industry as a whole is in a volatile state. Even if Washington Mutual is bought out, the government insures customers up to $100,000 per account.

With Fannie, Freddie, Merrill, and Lehman hitting tough times, the same is true for families right here in Southern Nevada. If you are buried in debt, there is free help to decide if it’s time to consider bankruptcy.

Before you make any decisions, it’s important to seek the advice of a lawyer. Clark County Legal Services is a place to turn without spending a dime. It holds two free bankruptcy classes per week, put on by UNLV law students and local attorneys.

Some people may qualify for free legal representation from the group.

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Published in: on September 17, 2008 at 10:06 PM  Leave a Comment  

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