Wamu Frozen by FDIC, JPMorgan Chase Rescue

by wildcherry on Thursday, September 25th, 2008 | Business, News

JPMorgan Chase buying Washington Mutual’s assets after FDIC seizes ailing thrift

NEW YORK (AP) — JPMorgan Chase & Co. Inc. came to the rescue of ailing Washington Mutual Inc. Thursday, buying the ailing thrift’s banking assets after WaMu was seized by the Federal Deposit Insurance Corp. This is the second time in six months that JPMorgan Chase has taken over a major financial institution crippled by bad bets in the mortgage market.

The deal will cost JPMorgan Chase $1.9 billion, and the bank said in a statement it planned to write down WaMu’s loan portfolio by approximately $31 billion. JPMorgan Chase, which acquired Bear Stearns Cos. last March, also said it would sell $8 billion in common stock to raise its capital position.

The FDIC, which insures bank deposits, said it would not have to dip into the insurance fund as a result of the seizure. There had been concerns that the fund, which took a big hit after the seizure of IndyMac Bank, could be depleted by a WaMu seizure.

The Seattle-based WaMu, the nation’s largest thrift, has roughly $310 billion in assets and was searching for a lifeline after piling up billions of dollars in losses due to failed mortgages. WaMu has seen its stock price plummet by 87 percent this year, and it suffered a ratings downgrade by Standard & Poor’s earlier this week that put it in danger of collapse.

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Tags: JP Morgan, JpMorgan buy Wamu, wamu buyout, wamu seized, Wamu seized by Fdic, Washington Mutual

6 Responses to “Wamu Frozen by FDIC, JPMorgan Chase Rescue”

1
nate Says:
September 25th, 2008 at 11:06 pm
oh… noooo!
2
wildcherry Says:
September 26th, 2008 at 12:50 am
Yea…been warning about Wamu for months…(looked at previous posting about is Your bank safe). At least they get bought by JP unlike Indy Mac.
3
bintangkecil Says:
September 26th, 2008 at 2:23 am
poor Indy Mac .. nobody wants to save Indy Mac.

Customers of WaMu withdrew $16.7 billion from accounts since Sept. 16, leaving the Seattle-based bank “unsound,” the Office of Thrift Supervision said late yesterday.

WaMu’s branches will open today and depositors will have full access to all their accounts, Sheila Bair, chairman of the Federal Deposit Insurance Corp., said on a conference call.

So, don’t worry!! You can still get your money back

nate, have you transferred all your money yet?
4
nate Says:
September 26th, 2008 at 10:30 am
not yet, but if it is bought by Chase and then taken over by the govn, that means the bank is closed? or will still be operating under govern?
5
bintangkecil Says:
September 26th, 2008 at 10:49 am
Bought by Chase, so the operations will be under JP Morgan Chase.
Wamu brand will be replaced by Chase brand within 1-2 months (bloomberg radio said …)

The WAMU website already says “Welcome to JP Morgan Chase!”

Here’s what’s the difference:

Your deposits at WaMu are now backed by the financial strength of Chase in addition to continuing to be insured by the FDIC.
If you bank at both WaMu and Chase, your deposits continue to be insured separately today just as they were yesterday, and generally will be for another six months. At that time, your deposits will be insured by the FDIC for up to $100,000 per depositor (with an additional $250,000 for self-directed retirement accounts), and will continue to be backed by the strength and security of JPMorgan Chase.
What stays the same?
- same account numbers,
- same Washington Mutual name on your account,
- same checks, debit cards, credit cards, deposit slips,
- same online banking website and passwords,
- same branches & ATMs,
- same familiar bankers, and
- same great service!
Click here to see more!
6
wildcherry Says:
September 26th, 2008 at 6:20 pm
$16.7 billion in 9 days…well if i’ve money in Wamu i would have contributed to that number :).