Washington Mutual Seized By The Federal Regulators And Bought Out

Washington Mutual, the largest home mortgage lender failed as a symbol of the end of the mortgage boom. Washington Mutual was seized on Thursday by the federal regulators. The failure of Washington Mutual was by far the biggest financial crush in the US history.

The speculations are that the collapse of Washington Mutual will not affect the bank account holders, however, the stock holders and the bond holders will be significantly impacted by the downfall. Washington Mutual accounts and deposits are insured by the FDIC up to $100,000.

Practically all of Washington Mutual assets were sold to JPMorgan Chase for $1.9 billion, as an emergency measure, thus insuring the additional backing of the account holders’ money.

The lawmakers reached a stalemate over the passage of a $700 billion bailout fund designed to help failing banks.

Washington Mutual employees came to work this Friday unsure about their job situation. It is still early to say how many employees of Washington Mutual will be laid off, but the estimates so far state that it could be as high as 5,000 employees facing a lay-off. Analysts’ expectations are that JPMorgan Chase will close about 540 retail bank branches, which currently overlap with JPMorgan branch locations.

Washington Mutual used to be one of Wall Street’s strongest performers growing along with the increase of mortgage lending. No wonder that its health suffered significantly leading the financial institution to complete demise due to the downfall of the housing market and the home mortgage backed assets.