Washington Mutual’s Chairman and CEO, Kerry Killinger, referred to the U.S. housing market as "a near perfect storm".
Killinger said at a a Lehman Brothers financial services conference:
"the combination of rising delinquencies, higher foreclosures, more housing inventory, increasing interest rates on many mortgages and greatly reduced availability of mortgages due to limited liquidity is creating what we call a near perfect storm".
On a side note, both Washington Mutual and Countrywide have been aggressive "dealers" in the Option ARM markets. Washington Mutual’s flyer explaining Option ARMs states "It’s both easy and smart". If you’re a reader of Mortgage Porter, you know I disagree. Option ARMs are not easy and not smart for a majority of home owners.
"Roughly 28% of Washington Mutual’s loans held are in these riskier option-ARM mortgage products, according to Plesser. By contrast, pay-option loans comprise more than 40% of Countrywide’s interest-earning assets". According to this article in Business Week.