Los Angeles Times (07/23/08); Reckard, E. Scott
Wachovia Corp. and Washington Mutual Inc. announced record second-quarter losses tied to the mortgage crisis, indicating that the fallout is now affecting loans to prime borrowers. Wachovia lost $8.9 billion in the second quarter, mainly due to its $122 billion portfolio of option adjustable-rate mortgages (ARMs), with $3.3 billion of the $5.6 billion reserved for loan losses set aside for these mortgages. Washington Mutual, also indicating problems with option ARMs, posted a $3.3 billion loss for the quarter. Its loan loss reserves total $5.9 billion.
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