Chase To Purchase WaMu

Washington Mutual

Earlier this week, the FDIC (Federal Deposit Insurance Corporation) stepped in to bail out Washington Mutual, which was failing as a result of nearly $20 billion in mortgage losses, partially as a result of the sub prime lending crisis.  Parts of the Seattle based bank are expected to be purchased by JP Morgan Chase, one of only five banks that had considered placing a bid for the now defunct organization.  Washington Mutual put itself up for sale about a week ago.

WaMu was under some pressure to secure a deal from creditors and ratings companies.  It’s sinking stock value and decreasing credit ratings would only cause more issues in the long run.  The move to aquire portions of WaMu by Chase serves as good news to the tax payers, as FDIC is not expected to directly fund any portion of the purchase.

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