Senate probe finds fraud in WaMu mortgage lending
WASHINGTON (AP) - Senate investigators say they found that the mortgage lending operations of Washington Mutual Inc., the biggest U.S. bank ever to fail, were threaded through with fraud. And the bank's own probes failed to stem the deceptive practices, the investigators say in a report on the 2008 failure of WaMu.
The panel says the bank's pay system rewarded loan officers for the volume and speed of the subprime mortgage loans they closed on. The report says extra bonuses even went to loan officers who overcharged borrowers on their loans or levied stiff penalties for prepayment.
Chairman Carl Levin says the panel won't decide until after the hearings whether to make a formal referral to the Justice Department for possible criminal prosecution.
(Copyright 2010 by The Associated Press. All Rights Reserved.)
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