Washington Mutual Inc., the largest U.S. savings and loan, said on Tuesday it obtained a $7 billion capital injection from private equity firm TPG Inc and other investors, but that mortgage problems will lead to a $1.1 billion quarterly loss and the elimination of 3,000 jobs.
The thrift also plans to close its 186 stand-alone home loan offices and stop offering home loans through brokers. It will instead offer mortgages through its retail branches, where some of the affected mortgage employees will be offered jobs, spokesman Derek Aney said.
“These companies are getting serious,” said James McGlynn, a portfolio manager at Summit Investment Partners in Southlake, Texas. “They are bringing in capital, (and) getting out of businesses where they weren’t efficient. It just seems like they are getting their comeuppance.”
“It’s a sign of smart money making a major bet in what they hope is a bottom in real estate,” said Robert Stovall, a strategist at Wood Asset Management in Sarasota, Florida.
Uh-oh. The vultures are circling.
Looks to me like those Option ARM’s were not the great idea they were cracked up to be.
TPG has always been pretty savvy, but I guess there is always a first time.