My 12 year old daughter says to me yesterday afternoon (Friday), “Daddy, did you know that WaMu went bankrupt, but my savings account is okay, because another bank bought them out?” You know we are in a banking crisis when middle school children talk about it.
I attended last Friday’s foreclosure sale at the courthouse in Port Angeles (Clallam County), in the wake of the bankruptcy filing of Washington Mutual. WaMu, which had assets of over $300 billion, is the second major financial entity after Lehman Brothers to file for bankruptcy protection. The fall of WaMu is the biggest banking failure in American history.
WaMu’s losses from their mortgage department will exceed $19 billion. Wow! Remember when one million dollars was more than we could imagine? Remember when we thought a millionaire was sooooo rich?
How does all this filter down to the little people of Sequim and Port Angeles? That’s hard to say, but I can tell you there were no buyers for the dozen properties sold at the courthouse foreclosure sale. The banks took those properties back, and now they will assign them to REO’s and list them for sale. I guarantee they will have to be short sales, because no one is going to pay full price, meaning the entire balance of the mortgage. The FMV (fair market value) is less than the mortgage balances, at least for this Friday’s foreclosures.
Last Updated on September 29, 2008 by Chuck Marunde