Industry News

Mortgage lender shaky in downturn

Analysts eyeing WaMu's earnings report next week

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As financial companies' second-quarter earnings results begin rolling out, analysts are closely watching Washington Mutual, which last month slashed its 2004 profit forecast and warned of layoffs. The woes of the largest U.S. savings and loan also have prompted speculation that it has become a takeover target. "Eighteen months from now, this is not going to be an independent company," Charlotte Chamberlain, an analyst at Jefferies & Co. in Los Angeles, told American Banker. But WaMu is not the only mortgage lender struggling. The industry is in shock as the market changes and prior record volume levels dip drastically. The CEOs of BankRate and Wells Fargo Home Mortgage have departed, Cendant is looking to unload its mortgage company and mortgage loan volumes are dropping off across the board. In a June statement, WaMu warned that increases in long-term interest rates would significantly impact its mortgage banking business. The lowered forecast was the second in seven months. It...