Tuesday, May 17, 2005

Loans Originated Without Sufficient Funds: Wamu

Mortgage firm Washington Mutual Inc. lost a round in court. "The Department of Labor has told Washington Mutual Inc. to rehire a loan executive, ruling that the company fired her in retaliation for blowing the whistle on certain mortgage practices."

"Theresa Hagman was vice president in the custom construction disbursement loan fulfillment center in California. Hagman noticed a sharp increase in loans on which borrowers defaulted, mainly because of insufficient due diligence during origination to determine whether there were sufficient funds to complete home construction."

"Hagman 'raised concerns that the bank was not following its written policies as required by law and therefore loans were being funded and underwritten without proper documentation or other safeguards,' the Labor Department ruling says. 'As a result, the bank, and consequently its shareholders, were put at financial risk' because Wamu was violating a number of federal laws and regulations on banking."

3 Comments:

At 10:34 AM, Anonymous Anonymous said...

Why would anyone in their right mind want to go back to work for a company after they blew the whistle on it?

Answer: she's a loan officer, so it's likely she's not in her right mind.

Talk about the job from hell, she's got it now. Glad I'm not married to her.

 
At 2:22 PM, Anonymous katie said...

Such trollish remarks.

 
At 9:47 AM, Blogger AsgardRagnarok said...

I can't believe that this post didn't get more comments. This is the kind of things that all Americans should be afraid of. The business practices of some of the largest mortgage originators. This just proves that they don't really care about if the loan gets paid back or not. The government (i.e. YOU) will just assume the risk if (when) the borrower defaults. People should be outrageously scared about this sort of thing happening.

 

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