A federal investigation into Wall Street and the economic crisis has honed in on Washington Mutual, making the bank that was absorbed by New York’s JPMorgan Chase in 2008 the poster child for what went wrong with the nation’s financial system.
The bank also securitized loans tainted by fraudulent information, without notifying purchasers of the fraud that was discovered, according to the panel’s report. The senators determined that WaMu’s compensation system rewarded loan officers for originating large volumes of high risk loans, and paid bonuses to loan officers who overcharged borrowers or added stiff prepayment penalties.
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Posted by Brian Davis on April 19, 2010
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