Washington Mutual to end 2 complex mortgage types

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By Associated Press

Summary

Washington Mutual Inc. said Wednesday it would stop offering two types of complex mortgage products as part of a shift in its mortgage business, as it works to deal with the fallout from the subprime mortgage mess.

Story Published: Jun 18, 2008 at 6:36 PM PST

Story Updated: Nov 20, 2008 at 8:54 PM PST

Washington Mutual to end 2 complex mortgage types
SEATTLE (AP) - Washington Mutual Inc. said Wednesday it would stop offering two types of complex mortgage products as part of a shift in its mortgage business, as it works to deal with the fallout from the subprime mortgage mess.

The nation's largest thrift said it would no longer offer negative amortizing loan products, and will also end its WaMu Mortgage Plus loan.

Negative amortization happens when a payment on a loan does not cover the interest due, and the amount of interest owed is added to the principal balance, increasing the size of the loan.

WaMu Mortgage Plus loans were mortgages with built-in lines of credit and flexible payments.

Washington Mutual also said it is adding $1 billion to its borrowers' assistance program, developed in 2007 to help people with subprime mortgage loans stabilize their finances and avoid foreclosure.

In aftermarket electronic trading, Washington Mutual shares fell 10 cents to $6.16, from their regular session close at $6.26.

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