From the AP:

Bowing to aggressive lobbying — along with assurances from banks that the troubled mortgages were OK — regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way.

"These mortgages have been considered more safe and sound for portfolio lenders than many fixed rate mortgages," David Schneider, home loan president of Washington Mutual, told federal regulators in early 2006. Two years later, WaMu became the largest bank failure in U.S. history.

The AP goes on to list several proposals from 2005 that were ignored. Here they are:

Regulators told bankers exotic mortgages were often inappropriate for buyers with bad credit.

Banks would have been required to increase efforts to verify that buyers actually had jobs and could afford houses.

Regulators proposed a cap on risky mortgages so a string of defaults wouldn't be crippling.

Banks that bundled and sold mortgages were told to be sure investors knew exactly what they were buying.

Regulators urged banks to help buyers make responsible decisions and clearly advise them that interest rates might skyrocket and huge payments might be due sooner than expected.

Countrywide, then the nation's largest mortgage lender, called the proposals "excessive" and claimed they would "inhibit future innovation in the marketplace." Whooooops.

AP IMPACT: US diluted loan rules before crash [AP]
(Photo: dooleymtv )

...opt-out of "courtesy overdraft fees" so that if you use your debit card and don't have enough money for what you're swiping it off, they will actually decline your card. However, you have to remember to never swipe as credit, only as debit.

Reader Jon thinks he's got it figured out. Opt out of courtesy overdraft screwing, and then ask for a debit-only card. "Voila," he writes, "you have a checking account and debit card immune to shady courtesy overdraft fees." However, since Chase now owns WaMu, I'm betting you have to already have a WaMu account for this to work.

(Photo: thekateblack)

PREVIOUSLY: 10 Banks That Could Be Next To Go Under (Photo: knightraven)

WaMu CEO: 3 weeks work, $18M [CNNMoney] (Thanks to Erik!)

ANNOUNCER: The uncertainty of getting a home loan made Paul irritable.
Paul pops child's balloon.
ANNOUNCER:Then he went to Washington Mutual. Thanks to their flexible lending rules, he got quick approval. Now he's always in a GREAT mood.
A series of horrible things happen to Paul, but he remains cheery.

"Flexible lending," there's an understatement. Full video below.

[via Wall Street Fighter]

As a banker with 20 years experience in the industry and veteran of about 8 takeovers throughout the years I can give you the scenario with estimated timeframes.

DAY 1 THROUGH 3 MONTHS
Nothing changes, you keep writing your same checks. You get the same statement in the same format. You log in to the same website address for internet banking. Maybe you see some new faces in your office from the "Takeover" bank (in this case JP Morgan Chase)

3-6 MONTHS
Few changes, mostly minor. You order checks and it has the new banks name on it, maybe new procedures for sending wire transfers or making loan payments. Half of the staff at your local branch has quit or been "re-assigned" elsewhere. They start changing the signage outside the office and get new brochures, but your accounts stay the same.

6-12 MONTHS>
You get notice that the format of your checks will change in a few months but you still can use your old checks for now and you might get assigned a new account number or given a new format that adds or subtracts digits. Some freebies you used to get with your account have disappeared (ie. you now get charged for a safe deposit box rather than get it for free). They've changed the hours the office is open. The only person you recognize when you go to the office is old Ethel, the head teller who's been there since 1977.

1 YEAR ONWARD
You get notice in the mail that your old account type is being discontinued and you now have the some new "special" type of account. You're not supposed to use your old checks anymore, if you make a mistake and write one anyway they'll probably pay it. Ethel retired and you don't know a soul in your old branch and it looks like any other Chase office.

Dow Jones reports that those of you waiting to hear more about those option-ARM, "pick-a-payment" or "pay-option" loans are going to be happy:

Wachovia, like WaMu, has a troubled mortgage portfolio and faces its own uncertain future. Saddled with a mountain of troubled adjustable-rate mortgages inherited through its 2006 takeover of Golden West Financial Corp., Wachovia has seen its financial condition weaken and its stock price plunge. Former Chairman and Chief Executive G. Kennedy Thompson was ousted earlier this year.

Both WaMu and Wachovia have taken big lumps from writing a mountain of so-called option-ARM loans, or adjustable-rate mortgages that allow some homeowners to actually increase their loans' balance by paying less than the full monthly interest they owe.

Option-ARM loans have quickly become notorious for showing high rates of delinquencies and foreclosures. Many option-ARM borrowers have increased their loan balances even as the value of their homes fell, leading many to stop making payments or walk away from properties altogether as their homes were worth less than what they owed on the mortgages.

Wachovia recently held more than $120 billion in such loans, a central driver that has led the firm to raise capital and slash its dividend.

Not too long ago the CEO of JPMorgan Chase had this to say about the coming wave of Option-ARM loans: "The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is quickly building." He added that the losses on these mortgages, which were given to people with good or excellent credit, will be “terrible.”

Wachovia shares sink, down 45% for week [Chicago Tribune]
(Photo: epicharmus )

JPMorgan buys WaMu [CNN] (Photo: So Cal Metro)

The New York Times, on the other hand, says that Citigroup, JPMorgan Chase, HSBC, Banco Santander (of Spain), and Wells Fargo are also interested in picking WaMu's bones clean.

It is generally accepted that the prognosis is not good.

WaMu steps up talks to find savior [CNNMoney] (Photo: James Callan )

The story begins several years ago, when Vijay and Supriti Soni were found guilty of forgery, falsifying real estate documents, identity theft and grand theft. According to court documents, the Sonis "obtained confidential information from various people – one of whom worked for Vijay and the rest who were clients for properties or mortgages – and then used it to acquire furniture, loan proceeds and commissions, real estate deeds and commissions, a Mercedes Benz automobile and cash for themselves."

So when the real estate bubble began to collapse, the Sonis saw an opportunity, and WaMu didn't do a criminal background check.

From the OC Register:

In July 2007, Vijay and Supriti Soni of Corona del Mar paid $440,000 for a home at 2129 W. Civic Center Drive in Santa Ana.

Five weeks later, they resold the house to Javier Hernandez – the family gardener and handyman – for $660,000. That's a 50 percent gain in 38 days – at a time when real estate prices in Santa Ana were plunging.

But the lender that financed both mortgages – Washington Mutual Bank – took a bath. In March of this year Hernandez's loan went into default and in July the bank foreclosed. On the trustee's deed, the bank listed the home's value at $377,137 – $220,000 less than the outstanding loan.

Records show that Washington Mutual, America's largest savings and loan and one of its most precariously perched lending institutions, financed at least 43 mortgages worth $24.5 million on properties bought and sold by members of the Soni family since early 2007.

So why didn't WaMu's new, stricter lending policies exclude the Sonis?

Experts told the OC Register that WaMu:

* Allowed financing of property flips that occur less than 90 days after purchase. The Federal Housing Administration imposed a ban on financing 90-day flips in 2006. The FHA also requires a second appraisal for homes sold at a 100 percent gain less than 180 days after purchase.
* Relied heavily on imperfect fraud detection software. Computers are good at flagging statistical aberrations – such as unrealistic income statements – but can be deceived by knowledgeable and determined insiders.
* Did not check criminal backgrounds. The Sonis had been convicted in 2003 of numerous felonies for a real estate fraud scheme. WaMu checks criminal backgrounds of loan originators, such as outside mortgage brokers, but not borrowers.

Last month, District Attorney investigators raided the family's homes and business offices. Now, prosecutors are investigating the Sonis and other members of their family for criminal behavior.

"Unfortunately, we are back looking at these characters again," said Doug Brannan, the deputy Orange County District attorney who prosecuted the Sonis in 2003.

The OC Register says that the Soni's effectively created their own market in Santa Ana, selling so many homes to each other for inflated prices that the sales were "later used by appraisers to give credibility to high asking prices for other properties in the area."

Here's an example:

Lohia bought the bank-owned house at 827 S. Flower for $249,500 on Jan. 4. She sold it 20 days later for $575,000 to her daughter, Suniti Shah, who financed the purchase with a $488,750 Washington Mutual mortgage.

That was a 121 percent increase in less than three weeks.

"Selling to each other, that's something an appraiser should definitely discover," said Mike Sanders, a Laguna Beach real estate appraiser and expert witness in property value litigation cases. "If the appraiser finds all the same people's names on transactions, then that's something suspicious."

WaMu loaned millions to O.C. home flippers with fraud history [OC Register]
(Photo: JOHN GITTELSOHN, THE ORANGE COUNTY REGISTER)

Web Extra: What to Do About WaMu [On The Money]

My husband and I were at the Cubs/Brewers game at Wrigley Field last night. At the door we were surprised to be given WaMu promotional string backpack/bags. This was in addition to the announced promotion, Carlos Zambrano bobbleheads.

Anyway, I was thinking that since the WaMu stuff was unannounced, they may have given it out last night (and earlier than planned) due to the uncertainty about their future/name. Probably wouldn't have worked later this season or next season!

(Photo: Bucklava)

laserjobs: The way things are going the FDIC will probably end up with WaMu. So as long as you are under the FDIC limits you will probably be with the safest bank around soon: WaMu Federal.

[Dealbook] (Photo: Maulleigh)

Regulators gauging other banks' interests in WaMu [AP]

JPMorgan Chase in new bid for Washington Mutual [Daily Mail]
WaMu Responds to Standard & Poor’s Actions [Press Release]
Washington Mutual stock rises; merger talk disputed [Reuters] (Photo: James Callan)

I asked if he had seen an uptick in the number of WaMu customers switching over in the past week. "We've seen it in the past six months," he said. "The rich people leave first, then everyone else does. Why don't you open an account?"

When asked if WaMu customers were opening up Chase accounts as backups, he said, "Most people just switch."

PREVIOUSLY: Don't Start Yanking Your WaMu Accounts

In the event of WaMu failing, the FDIC will swoop in and your deposits will be assumed by a new bank. You would still have access to your deposits as normal via ATM, check, and debit cards. There might be a brief delay while they re-establish telephone and internet access.

The worst thing for WaMu would be if a run on the bank started, vaporizing their liquidity. Then people worried about the worst happening would be in fact causing it.

(Photo: thekateblack)

He was replaced by Alan Fishman, former president and COO of Sovereign Bank. The company has also entered a "memorandum of understanding" with the Office of Thrift Supervision, which is like probation for banks, requiring it to disclose lots of info to regulators throughout the year. Killinger built WaMu into one of the nation's largest thrift banks, but then got the bank into too much of the sub-prime mortgage business and over-aggressively expanded its retail outlets. His rolling head joins a line of other recently executed banks CEOs, Wachovia's Ken Thompson, Merrill Lynch's Stanley O'Neal and Citigroup's Charles Prince.

How much severance is he getting? WSJ says:

People close to the situation said Mr. Killnger would retire under the terms of his employment contract with no extra severance benefits. According to the most recent Securities and Exchange Commission filing related to Mr. Killinger's compensation, he held 1.2 million shares of common stock as of Dec. 31, 2007, currently worth about $5.2 million. He also has $14.9 million in deferred compensation and $3.5 million in pension benefits, according to the filing.

WaMu Placed On Probation As It Ousts CEO Killinger [Dow Jones] (Thanks to Dariush!)

In March of 2008, I used a debit card on an online poker site, which happened to be a foreign vendor. I know it wasn’t wise, but I did. I had no issues at all with site, until I made a withdrawal in mid-April. A few days after that withdrawal I spotted several large charges pending on my WAMU debit card account that I did NOT authorize. The poker site used a foreign third party card authorizer and apparently they decided to have some fun with my card. I contacted the poker site and informed them of the problem, and they refused to do anything for me. The third party does not even have a contact phone number. I then called WAMU before the charges could even post, and was told that I would have to wait until they posted before the dispute could be done. After all was said and done, 15 unauthorized charges totaling $3,400 hit my account. I canceled that debit card, filed the dispute and was given a provisional credit within 5 days.

The following week, I received a letter from WAMU stating that I needed to contact them about what documentation they needed in order to pursue the dispute. That’s all it said. I called on April 29th and spoke to a CSR about what I needed to send the fraud claims department. She told me that all I needed to send was a written and signed affidavit detailing what had happened and what I had done to remedy the situation. I did exactly that and faxed it to them that same day.

I hadn’t heard anything for about a month and called the claims department. After waiting on hold for over half an hour, I was told that they had no new information.

Two more months go by. I received a letter from WAMU stating that I had not provided them with enough documentation to pursue the claim, and they reversed the provisional credit. I called them immediately and after being on hold for 45 minutes this time I spoke to another CSR, and then a manager. I was informed that they sent out a letter on April 30th, the day after I faxed my affidavit, which said I still needed more documentation. That second letter magically never arrived. They told me that it was too late and they would deny me the ability to fight these charges with the vendor. I explained to them over and over again about how I did exactly what was asked of me, and did NOT receive the second letter. Finally to get me off the phone, the manager suggested I submit a re-assertion letter to get the claim reopened, along with any documentation I could provide. There wasn’t a lot of documentation to provide, since it’s kind of hard to prove you didn’t authorize a charge online. I provided them with copies of emails to the poker site and the third party vendor demanding they credit the unauthorized charges.

Three weeks later, I am told that again they will not pursue the claim. The CSR is extremely rude to me and almost seems to gloat about me being screwed. She said, “You didn’t send in enough documentation within the prescribed deadline. Now you’ve sent in the documentation, but it’s still past the deadline.” Too bad…so sorry. I was told that I should have read the important information on the back of their notices (one of which I didn’t receive) informing me of the deadline.

Now I’m not stupid. I realize that WAMU is pre-judging me based on the fact that I dealt with an online poker site. But I believe they are breaking my rights by not even pursuing this dispute. All I’m asking is that they continue on to MasterCard and file the dispute with the vendor. I’m not asking for any provisional credit. If they would actually let this claim continue, the burden would be on the vendor to provide documentation. The vendor can not have any documentation, since I did NOT authorize the charges. I’m only asking that they follow the law. They have gotten around this by failing to send me a second notice, and never actually providing me a list of sufficient documentation on the first notice. Because of that, I missed the deadline.

I filed a claim with the Better Business Bureau. A CSR from WAMU called and left a message on my cell phone in a very haughty tone, saying that they were aware of the complaint I had made, and that they were so sorry, but I missed the deadline. They suggested I sue the vendor.

They know I can’t file a lawsuit against the vendors, since they are not in the U.S.

I plan on contacting the Office of Thrift Services, but do they actually have any clout in this matter?

Sincerely,

Rob K

OTS is WaMu's bank regulator, so yes, they do have clout. You can also try contacting their executive customer service team. Then, after you get your money back, switch banks.

Then, next time you want to play poker, consider a friendly game with your buddies. As your letter states, online gambling doesn't attract the most savory of business people. If you do have to scratch the itch, at least use a credit card, not a debit card. That way, if the account gets hijacked, it's the bank out the cash and not you.

We asked WaMu whether this was standard policy or if their letter-sending facility is having an error, and await their response.

(Photo: Getty)

UPDATE: 9/02/08: In response to our email inquiry, WaMu has said they're interested in checking out this story.

After reading on WaMu's website that it would assist distressed borrowers with loan modifications, Lori Pestana called and was told they could not qualify until their payments were 50 days late. To become eligible, they stopped paying and applied for help on Oct. 9, 2007.

WaMu told them that they could expect an answer in 4 to 5 weeks. On Nov. 13, a law firm representing WaMu sent the Pestanas a letter informing them that they were in foreclosure.

The Pestanas said they tried at least twice to determine the amount they could pay to reinstate their loan, but Harmon Law either did not call back or could not give them an amount. Another time, Harmon Law refused a $12,000 payment, because it was $3,000 short of the total payoff amount, the suit said.

The Pestanas are currently scheduled to be evicted from their home later this month and are suing WaMu, seeking class-action status for all of WaMu's Massachusetts customers. WaMu says it "fully committed to helping our customers stay in their homes" and that "foreclosure is a last resort."

Suit blames loan servicer for pending foreclosure [Boston Globe]
(Photo: stirwise )

Brett writes:

Mark (my boyfriend) and I decided to move our accounts to the same bank to facilitate account transfers easier. Figured why not try a new bank while I was at it. We chose WAMU based on some research that showed them to have the lowest fee's and the no charge ATM fee's for foreign banks.

We opened our accounts online, after answering all the security questions we were in business. I switched my direct deposit, and began using the account. When it came time to pay the rent, mark attempted to get me his portion of the rent. He did a $1000 transfer using his debit card from commerce (considering it a cash advance). We waited a few days, and when we tried to buy new iPhones , he swiped his wamu MasterCard (debit) and it came back declined. After calling he found out that his deposit was put on hold and flagged as suspicious.

Unfortunately I had already deposited his check. My deposit was also put on hold. Needless to say neither of us had this money available. They apologized for the inconvenience, but was assured we wouldn't get caught with any bounce fee's. Finally a week after he made his deposit we received a letter outlining this hold, I've attached an example.

A week later it happened to me, a check I deposited was put on hold resulting in a bounced check to my roommate. I also made a deposit of my payroll check later that week, also put on hold. After several calls to customer service and talking to supervisors, I had most of the holds removed. In order to get the $1000 from the bf to pay my roommate, we went into a branch, we asked for the $1000 as cash, and then we would then deposit the cash into my account. The teller at the station told us she would do a transfer from his WAMU account into my WAMU account, assuring us it would be treated as cash, and would be available as such.

As my boyfriend was closing his account, the branch manager told us in the future if he wanted to reopen an account, to do so in person. She said these problems are common for those who open accounts online. After waiting a few days, and feeling confident there wouldn't be any other holds set on my account, I gave the go ahead to the roommate to cash the check. He did, a week later I get the attached letter; it happened again!

So I called Loss Detection,and she said that the branch had processed it as a check and not cash. I was admittedly upset by this time, and told her as such. Her response to me was she would hang up on me if I insulted her. I of course was level headed through out the conversation, but was taken aback her immediate response was to threaten me. In the end, she was able to clear the hold, but not before the other check bounced.

Apparently WAMU has a policy putting new customers on "probation" for 90 days, this is a ridiculous amount of time and terrible customer service. I understand most banks have probation periods but not as long, or as strict.

We have both since switched to chase and closed these accounts.

It's disingenuous to advertise signing up for banking online like it's super easy and awesome, and then use a different set of rules that punish the customers that just did what you told them to do.

Waits improve at IndyMac bank branches [LAT] (Thanks to Kathy!)

(Photo: zoliblog)

He called WaMu's customer service to ask where to find a branch that stayed open late and/or to request that his ATM limit be raised just for the day. The WaMu CSR wouldn't transfer him to a supervisor, accused him of making terrorist threats, and lied, claiming that her supervisor was on vacation. Yikes.

Usually I am not one to complain about customer service. I am the kind of guy who understands that everyone has an off day, and I will usually roll with it. This however mad me so mad, I felt the need to share it with Consumerist.

I recently moved from the West Coast to Florida for work. With a new job, and new apartment, I decided to make from BofA to WaMu. One of the best decisions of my life. Or, so I thought. For work, I travel in Europe, a lot. Anywhere from three days to three months. I am pretty good about making sure my landlord has my rent if I am going to be out of the country. On a recent trip, I had to stay a day longer with a client, thus arriving back into the US later then I planned. The next day my rent was due. I tried to get out of my office for a few minutes to run down to the local WaMu branch which is close to my office. Unfortunately I was unable to. I got to WaMu that day at 5:55 PM. WaMu say they close at 6:00 PM. What they mean is that the doors are locked and you cant speak with a teller or Supervisor from 5:45 PM. So, I used the ATM. I was only able to withdraw ½ of my rent. That’s fine, I’ll call up WaMu, and see if there are any open Branches around. If not, then maybe they can increase my daily limit today.

The first person I spoke with said that there no branches open, and the SHE couldn’t increase my limit. So, I politely thanked her, but asked to speak with a Supervisor. When the Supervisor came on the line, she informed that there was nothing she could do. Ok. I explained the situation to her again. Her response was “It is not my problem if you did not plan to pay your bills on time.” I have a pretty quick temper, but I kept my cool. I said I did not feel it was her place to judge how I handle my business with my landlord, and I would like the name of your Supervisor please. She gave me the name of her Supervisor. When I asked to be connected, I was informed that the Supervisor was on vacation.

Now, I didn’t think this person would give me the name of a Supervisor who was on vacation. I was shocked when she said she did. I proceeded to inform her that, this was unacceptable and I would like to speak with a Supervisor. I proceeded to inform her that if she called my office, looking for my Supervisor, I would find one that was there, and not one that was on vacation. At this point I am extremely irritated, steaming mad, but remain collected. Until she informs me that I am making terroristic threats, and she is going to get HER SUPERVISOR on the phone. Needless to say I was stunned. Instead of pleading ignorance, this CSR HAD ACTUALLY LIED TO ME.

When the Supervisor came on the line, I explained what the situation was for my original call. At this point however, I am actually pulled over on the side of the FREEWAY, and explaining to the Supervisor what has transpired from my side. I did not even care that I could not get an increase on my daily limit. I explained as calmly as I possibly could, that this CSR comments were unprofessional, rude, and inappropriate. I again explained that if this Supervisor were to call my office, and ask to speak to MY Supervisor I would make sure she spoke with one, and not be given the information for someone on vacation. I further explained that this was THE WORST experience that I have ever had with WaMu.

Total time spent on phone with WaMu customer service: 97 minutes.
Total frustration experienced: incalculable.

Total time with WaMu from first deposit to this incident: 16 DAYS.

Terroristic threats? What? From the tone of your letter, it sounds as if you might want to switch banks. Bankrate had a great tool for comparing checking accounts with local banks and credit unions.

If you're just looking for an apology, here's some executive customer service contacts for WaMu.

(Photo: stirwise )

(206) 461-2000 x 489 Laura

Rosalva Alvarez
rosalva.alvarez@wamu.net
1-800-225-5497, option 1, option1, extension 467
Fax: (206) 965-3082

Executive Response Team
Customer Relations Manager
Washington Mutual Bank
(800) 225-5497 Opt. 1 Ext. 467
Fax (206) 965-3082

(206) 377-8196, (206) 461-2000, (206) 461-6414, or (206) 461-8779. You can try asking for Ms Cindy Modica, VP of Quality Service.

CEO Kerry Killinger
kerry.killinger@wamu.net
His assistant, Wendy: wendy.cadman@wamu.net
206-500-8779

CFO Tom Casey
tom.casey@wamu.net
206-500-4201

Chief Legal Officer Stewart Landefeld
stewart.landefeld@wamu.net

President and COO Steve Rotella:
steve.rotella@wamu.net
206-500-8302

Another option is to try launching an "Executive Email Carpet Bomb." These posts tells you how.

(Photo: Whatsername)

Checking

The Wamu Free Checking acct gets 3c per swipe for Debit Rewards. The total occurred from all your swipes gets credited to the account on the anniversary date of the account opening or being converted to a Wamu Free Checking.

If you have the old Free Checking account which doesn't have debit rewards, or any other kind of checking for that matter, it can be upgraded by the 1-800 number. Filipino bankers are unable to process that request but a US based banker or supervisor can, and it will be switched within 1 bus day.

ATM's

ATM deposits can be a lot more difficult that in-store deposits. ATM deposits are ALWAYS placed on hold, not 80% of the time. First $100 immediately available, then the rest above $100 goes on hold. BIG TIP! If you want it all available, make separate deposits of $100 (if its cash you’re depositing). If the deposit is made after 3PM PST, or 1PM CST, it will be on hold 2 business days, if before, 1 business day. If it is ever placed on hold longer, that will be because our risk operations department, who review the deposited item scans, cannot properly verify the item, and they will adjust it to 5-7 bus day hold. If you do the deposit in the branch all this trouble can easily be avoided.

We CAN usually see the item deposited. Just call the 1-800 number and ask, if the banker says they cannot, ask for a supervisor. We can. If it's a cash deposit, and it's still on hold, the supervisor can remove the hold immediately if we can pull it up in the system.

Our ATMs do have a fee for customers of 3rd party banks. It is $2 in most states and is increasing to $3 shortly.

Fees

The puppy commercial is horribly wrong. The 1 overdraft/NSF fee waiver is automatic and you don’t have to call/stop in the branch to get it waived. The commercial makes it seem like we will waive all overdraft fees, and we wouldn’t be a bank that way would we.

Overdraft charges depend on state because it depends on state laws and the average market going rate of an overdraft fee as far as other competing banks go. This depends on what state you OPENED the account. For example, California is $33, Texas is $27 for the first 5 fees occurred in the rolling year cycle, then $35 for all above the 5 mark.

You can only get courtesy fee waivers from the branch the account was opened at, or the 1-800 number by speaking to a supervisor ONLY. If it’s a bank error anyone should be able to waive it. At the 1-800 number courtesies are judged from an internal checklist. The account has to be opened for at least one year, have no returned deposit within the last 90 days, or have any kind of block on the account for account abuse/deposit fraud etc. The account cannot have had a fee waiver between the time you are calling and the last anniversary date of the account opening. As long as everything checks out we go by a typical grid to determine how many fees:

$0-$3000 - gets one fee waiver (such as OD/NSF/SERVICE)
$3000 - $5000 - gets two fee waivers
$5000 - $10000 - gets three fee waivers
$10000 or more - gets four fee waivers

Fees that cannot be waived unless bank error:
$100 legal fee (when levies etc hit account)
$10 Excess activity fee (for breaking the rules of Regulation D in a savings/money market acct)
$12 Return Deposit Item Fee - because that would mean an RDI within last 90 days.

There is a little-known secret about overdraft fees too. You will only get one if your CURRENT balance goes overdrawn. If you have a deposit hold for example, the account available balance will go overdrawn but your current balance won’t, so any debit card transactions that post will not charge the account unless they take the current balance over too. Now this doesn’t work for checks or electronic debits. If the funds aren't available with the overdraft protection, they WILL get rejected based on the available balance and charge an NSF fee.

The overdraft transfer service can bite you in the ass, because it goes by your AVAILABLE balance, unlike overdraft protection. If your available balance slips the system will kick in and transfer the amount you went overdrawn plus $12 fee from your savings. Because it goes by your available balance, ANYTHING that affects your available balance will ding the service if it goes below zero. If a merchant charges you incorrectly for example, and it pends against your account and takes the account overdrawn, it will activate overdraft transfer, but if the merchant doesn’t carry through with the authorization and debit the account, you’re out $12.

Check Holds

It doesn’t really matter what the check is, it will be placed on hold depending on:
A) The amount (Anything over $5,000 is typically held longer)
B) Recent overdrawn activity
C) Recent return deposit item activity
D) Whether it is in-state or out-of-state
Nice branch managers will call the other bank to verify the check, so that they can release it all for you. It is manager discretion at the branch to release any deposit hold.

Here's some extra tips:

-All US bankers go home by 10PM PST. Supervisors after this point are all in the Philippines, and don't have as much power as US supervisors. When you call during US banker hours ALL supervisors are American.

-We will fedex a replacement debit card free within 2 business days if you say that you are traveling within a week and say your card is lost/stolen.

-If a banker accesses your account, they leave a record of their employee ID and activity. If someone is pissing you off, make sure they at least give you your balance (so they live a mark), then speak to a manager to file a complaint. When we do this, we send an email to their manager.

-Even if a supervisor doesn't resolve your situation, you can go higher. Contact the executive response team. They can bend the rules further than the above fee guidelines also.

-Other banks ATM machines will cause a $2 balance inquiry fee if you use it to check your balance. Don't do it! Just pick up the phone and call instead, it's free.

PREVIOUSLY: 36 Confessions Of A WaMu Banker

Dear Mr. Popken,

I recently read with great interest your article entitled Satisfaction Guaranteed in the recent May edition of the reader’s Digest.

Since November I have been living a nightmare in trying to contact someone in a position of authority at the Washington Mutual Bank in regard to my mortgage, to no avail. Apparently you can go into any of their branches and fill out paperwork to get a mortgage but if you run into a problem you are just out of luck.

Over the past six months I have been disconnected more times than I can count while navigating their 866 “customer service” number. No one in their company has the presence of character to sign a name to any form letter correspondence never mind give a direct phone number to personally speak to. I have written letters to the members of their Board of Directors without any response. I have contacted officials, Senator Frank Lautenberg and Congressman Rodney Frelinghuysen whose attempt to contact the bank on my behalf have also gone ignored. Correspondence I have received from Washington Mutual is sporadic and schizophrenic at best.

I received a request to inform them of any hardship I may be experiencing and promptly replied with an explanation and a proposal that would benefit us both only to receive a denial of my request (in a timeframe too short for them to have properly reviewed it) one day and literally another letter the next day asking for additional information because they want to work with me.

After six months, I recently received a phone message with a first name and extension to call. Upon calling the number (you STILL have to navigate the 866 “customer service” AND the probability of being disconnected is high) I reached an answering machine with a message that says you can ONLY leave one message and you will receive a call back within 24 hours...not so. I have found myself going back and forth waiting for a reply call to actually talk to a human only to receive another denial of the proposal I resent. This latest letter (received today, Friday) was dated BEFORE the recent phone call.

After finally getting through the "customer service" for Wa PU I spoke to a loan person who basically told me my file was closed in Feb. and everything I had sent after that was for nothing and oh by the way they are selling my house in June....... I guess that was supposed to be a surprise.....

I understand that Washington Mutual is on very shaky financial ground (AND SO IT SHOULD BE!) and it is my hope they receive NO outside financial support because their business practices are DEPLORABLE.

...I truly appreciate your help. I am at my wits end, it has been a VERY stressful six months...If it was just me to worry about it would be one thing but I do have three children who will also be affected.

If bombarding their board members has no results, I may type up my complaint and stand outside one of their busiest branch offices and bring my plight to their entering customers. How can they not want to work with people to find a solution?

Thank you for your article and some direction.

Here's the contact info we gave her:

Executive Response Team
Customer Relations Manager
Washington Mutual Bank
(800) 225-5497 Opt. 1 Ext. 467
Fax (206) 965-3082

There's also (206) 377-8196, (206) 461-2000, (206) 461-6414, or (206) 461-8779. Try asking for Ms Cindy Modica, VP of Quality Service Management.
Also check out this post for additional tips for dealing with executive customer service: http://consumerist.com/consumer/howto/be-a-customer-service-ninja-177811.php

(Photo: Getty)

Loathe the outsourced customer service reps on the Washington Mutual phone lines? Just ask for a US-banker, says one WaMu insider:

Everyone here at customer service I know where I work HATES the outsourced bankers.. not only are they stealing our jobs, they cannot think outside the box, sometimes they cant even speak properly, and they CONSTANTLY fudge up peoples accounts, but management seems to keep hiring more! Cheap crap labor. We in the supervisor teams are always having to clean up after their mistakes, and sometimes there isn't anything we can do, such as reopen a debit card they accidentally closed as being lost or stolen, and the customer gets the full force of their incompetence. The only time I see that coming from US bankers is when they are in training and that's it. And of course the customers hate them too.

Always ask for a US banker if you get through to customer service. When a Philippines banker is asked to transfer to a US banker it goes to a supervisor and it costs more to hire more supervisors, so if more people do that... imagine the message management will get.

Cool. I didn't even know you could ask for a US-banker. As a Washington Mutual customer, this is definitely a tip I will be using in the future. Probably works for other banks, too.

(Photo: Maulleigh)

Lila got her Washington Mutual debit card pickpocketed while traveling in India. Naturally, her account was drained. She filed a fraud report with Washington Mutual and a got a temporary credit issued on the account while the case was investigated. Less than 3 days later, the credit was reversed without warning. It's not WaMu's policy to reverse provisional credits in these matters before 30 days have passed to investigate, and not without warning. None of the various reps and fraud personal could explain why this happened, nor could they give her her money back, nor could they connect her with anyone who would or could do anything. Supervisors are mysteriously never around. It's a good thing she already had some Rupees in hand when the theft occured, or Lila could have been stranded in the Himalayas while WaMu reps were busy playing Snood. Her complaint letter, and our advice on how to be more effective, inside...

Thursday May 29, 2008

To Washington Mutual Management and Whom It May Concern,

I am not typically the kind of person who writes emails to large companies where the people on the receiving end are probably just overworked, and bored individuals in suits who could careless about me and my concerns. In fact I assume the majority of angry letter writers out there are well over their 60’s, but I am still under the age of 25. Still I am compelled to write in the hopes that someone in one of the offices out there will take a second to look at the appalling customer service that patrons such as my self are receiving on our end of the WAMU customer service phone lines.

Let me please explain my situation. Recently I have been in frequent contact with Washington Mutual due to the theft of my debit card. I spent the last about 6 months in India on a study abroad program. Around April in the city of Hyderabad, while on my way to another more remote part of the country, I was pickpocket and my debit card was stolen. I unfortunately did not fully realize that the card had been stolen until I was already in the far north area of India. Needless to say by the time I was able to contact my mother in the United States, through email, and her able to act on the situation, the perpetrator had already drained my account. Had I not already of had some money in Indian Rupees would I have been practically stranded in the Indian Himalayas. As soon as we could my mother and I started the claims process with Washington Mutual. I was issued an amount of provisional credit, contingent on the fact that I would have to sign an affidavit back in the United States.

Once returned to the United States I did sign and mail the affidavit. I was under the expressed impression that the provisional credit would last for at least 30 days, while the case was being examined. Unbeknownst to me the provisional credit was reversed less than 72 hours later. I received no email, letter or phone call to inform me of this situation so I continued to use my debit card, believing the provisional credit to be true and valid.

On May 24th I decided to sign up for Wamu online banking, previously I had just tried to keep a written record of my accounts. It was then, through the online banking that I realized my account was in the negative, mostly due to 264 us dollars worth of overdrawn fee’s.Then I saw that the provisional credit had been reversed on May 12th, after only being issued on May 9th.

I decided to call the customer service to investigate the situation more clearly. The women on the form told me that the customer service could not help me, that I had to call the claims department and that they were not open on memorial day weekend. She offered little consolation and absolutely no explanation. I called again on Tuesday, and after a 39 minute wait received the claims department. They gave me the run around and told me to call back on Weds. So I called back again on Weds. and had another nearly 30 minuted wait to reach the claims department.

This time I reached someone named Douglas who was very friendly and reassured me the matter was being investigated, but he could not explain why the provisional credit had been reversed. He admitted it was not their policy to reverse credit before the 30 day investigation policy, and not without communication to the account holder. I asked him if anything could be done about the eight $33 overdraft fee’s that were a direct result of the provisional credit being reversed without my knowledge. He told me he would notate my account and transfer me back to customer service to see if they could help me. I had previously deposited $450 into my account to have it directly eaten up by the negative balance. Being transferred back to customer service was a horrible affair. No one would help me, and each person said that it was only up to the claims department to reverse the charges now. The phone call ended with me literally in tears when the manager of customer service hung up me.

I called back again today, Thursday May 29th, hoping to reach Douglas again. Although for some reason he was unavailable, I did reach another associate in the claims department who was friendly and sympathetic. I explained to her that this situation had gone on for days, and I was down to my last $20. If this situation didn’t get resolved soon I wouldn’t be able to pay my rent, or my bills. Although considerate and helpful, she said the issue was under review but she did not have the power to help me and none of the supervisors who could were around.

Now it is Thursday afternoon and this issue has yet to be resolved. I am still dissatisfied with Washington Mutual’s treatment regarding this issue, and I am still confused to has how it got to this point. How can Washington Mutual claim to pride itself on customer service, and customer satisfaction when this situation clearly does not demonstrate those ideals. Even when, or if, this issue ever gets resolved I have to question my loyalty to a bank that so obviously does not respect me as a patron. People do not have to Bank. They are not entitled to our money, yet Banks seem have an attitude that customers are lowly creatures, especially customers like me who work hard all the time for the little savings we do have, and never seem to break even in our bills. Outrageous 33 dollar overdraft charges, and money that just seems to go missing sets a person in my income bracket back about a month. The money that was in the provisional credit, and the overdraft fee’s is the amount I need to pay next months rent and bills, due in less than a week. But Washington Mutual does not seem to care about small issues like this. I find it very sad and discouraging that right now I feel like stuffing my money under my mattress would be a better option than banking with Wamu ever again. At least my mattress wouldn’t make me cry, keep my on hold for 30 minutes, or steal my money in overdraft charges.

I apologize for being so snide, its just aggravating that the situation has gotten this far without any clear resolutions. Thank you for taking the time to read this letter.

Sincerely,
Lila B

Sounds like you're getting stuck in "I only get paid $5.85 an hour" hell. Here are some phone numbers for high-up people who can help you out better than what you've been dealing with so far. Call them up, calmly and succinctly explain what you want them to do, and they just might work some magic for you.

Some advice on writing complaint letters for fun and profit: they're usually much more effective if you can find a high-ranking executive and mail the letter directly to them. Dear Kerry Killinger is going to be more effective than Dear Washington Mutual Management and To Whom It May Concern.

Lastly, I would be remiss to not take the opportunity to point out this story illustrates the hazards of debit card use. Lila would have been much better off with a credit card. That way when it got stolen, the bank would have been out the money instead of you.

Executive Response Team
Customer Relations Manager
Washington Mutual Bank
(800) 225-5497 Opt. 1 Ext. 467
Fax (206) 965-3082

CEO Kerry Killinger
kerry.killinger@wamu.net
His assistant, Wendy: wendy.cadman@wamu.net
206-500-8779

CFO Tom Casey
tom.casey@wamu.net
206-500-4201

Chief Legal Officer Stewart Landefeld
stewart.landefeld@wamu.net

President and COO Steve Rotella:
steve.rotella@wamu.net
206-500-8302

(Photo: babasteve)

After another battle with a branch manager today—who insisted that money couldn't be returned and that I needed to fill out a fraud report—I went over her head.  After a heated, uh, discussion, the main downtown Seattle branch put the $1,500 back in my business checking account.  The $7 fee was refunded a few hours later.
 
Some bad PR in Consumerist no doubt helped. Thank you!

We're not sure we posted the story in time to have an effect on the outcome, but we'll take it.

RELATED
"WaMu Presents Random $1500 Check On Someone Else's Account, Then Calls It Fraud"

[Update: WaMu has returned the money.] Bill's small business account was hit with a $1500 check written by an unrelated third party to another third party—both completely unconnected with his account. He was also penalized with an insufficient funds fee, although the money was debited from his account. Now WaMu's saying they have to investigate for fraud before they can return Bill's fees.

I received a returned check notice from Washington Mutual last week. Not unusual for a small business — until I opened it.

The check in question was a $1,500 private party check written to another private party. The check wasn't written by, or issued to, my business.

Simple mistake? I visited the WaMu branch across the street from my office and got the stunning response from the branch manager that they'd have to do a fraud investigation. I raised hell again today, and the money, plus a $7 returned check fee, still hasn't been returned to my account.

I'm considering going to go to small claims court — or swear out a theft complaint against WaMu — to get my money back. The only fraud is that WaMu or KeyBank (the check in question was written on a KeyBank account) screwed up and they're taking it out of my hide. I'm the innocent bystander.

Maybe WaMu is trying to cover its losses by randomly reassigning bounced checks to accounts that have money in them and hope no one notices.

Why can't WaMu assume the $1500 loss while they investigate what was probably a clerical error, instead of forcing the problem onto their customer? Maybe WaMu should amend their new ad slogan to "We've got your back... unless we're covering our own asses."

John found himself the proud father of a $10 fine from WaMu this morning because he exceeded 6 transfers from his savings account during a single billing period. When he called in to find out why this happened, he was told it was a federal regulation: "The representative from Wamu said there was nothing she could do and I need to better monitor my account. Honestly I just want to know if anyone else has had this problem?" It's a real regulation, John, but banks don't have to charge a fine—they can also simply warn you or not allow the seventh transaction—but then they wouldn't get to make another $10 off of you.

John writes:

I talked to the person who couldn't do anything for me and then I talked to a "Manager". She explained to me that there are federal regulations that state that a person can only transfer money 6 times in a billing cycle.

The regulation she's referring to is Federal Regulation D, and in section 204(d)(2) it defines exactly what constitutes a savings account. One of the characteristics is there can only be up to six pre-authorized or automatic transfers—however, you can make as many transfers as you want in person or via an ATM machine.
 
The $10 fee WaMu hit you with was entirely their own invention, however. A footnote to section 204(d)(2) describes what banks can do to ensure customers don't go over the limit:

In order to ensure that no more than the permitted number of withdrawals or transfers are made, for an account to come within the definition in paragraph (d)(2) of this section, a depository institution must either:
 
(a) Prevent withdrawals or transfers of funds from this account that are in excess of the limits established by paragraph (d)(2) of this section, or
 
(b) Adopt procedures to monitor those transfers on an ex post basis and contact customers who exceed the established limits on more than an occasional basis.

Call us pessimists, but we bet every major bank opts for an ex post fine in order to generate additional income. That means if you have to make more than six transactions in a given month, use an ATM machine if you can.

(Photo: Getty Images)

Our reader writes:

I work for a law firm and recently we had about a year long go around with Washington Mutual.

One of our clients needed proof of a substantial loan they had made (>$30k) via cashier's check, but could no longer find their slip stub as the loan had been made a few years earlier. She called and wrote to WaMu requesting a copy of the cashed cashier's check for proof that the loan had been made. They sent her a letter saying that the cashier's check would be sent under separate cover in 15 days. A month later, no copy.

We then sent a request on our letterhead requesting a copy (with a signed permission from the client allowing us access to the document). We received a similar letter stating we would receive a copy of the document in 15 days. Again, three weeks later (to allow for possible mail time), no check was received. We sent three separate requests, all of which were responded to with the same form letter stating 15 days, but no copy of the document ever appeared.

Finally, we resorted to subpoenaing WaMu to produce the document. We went around and around with them attempting to get a copy of the document with WaMu admitting that they couldn't find it and that all traces of the loan were gone. Later, they produced an electronic print out showing the deduction from our client's account, but not to whom the money was paid. We needed a copy of the document that reflected who had been paid. After many, many phone calls, mostly from their subpoena intake group attempting to get out of having to send someone to personally appear in court (one of which showed up at the courthouse on a trial date WITHOUT the document) and WaMu insisting the entire time that they did not have a copy of the document, a SECOND subpoena, AND threats to hold them in contempt of court, they coughed up a copy of the document.

If a law firm with the power of a subpoena behind them can't get WaMu to cough up a document in a timely manner without a massive amount of headache, I'd hate to see what the average consumer has to deal with. I'll be sticking with my credit union.

Shareholders Score at WaMu [Business Week]
PREVIOUSLY: WaMu Rewrites Executive Bonus Plan To Avoid Subprime Meltdown Responsibility

I had an interesting time last night at my local Washington Mutual.

I am getting ready to leave on a trip to Las Vegas for a friends wedding so last night I decided that I would actually go into a Washington Mutual branch and withdraw my 'bankroll'. It was about 10 minutes to close but there thankfully no line. I filled out the withdrawal slip for the cash that I wanted, approached the teller, scanned my ATM card, entered my PIN and handed her the slip. She immediately asked if I wanted a check for the amount ($4.2k) and I said no, that I wanted cash. She then yelled to the manager across the bank about the transaction. He asked; how much? She said "$4200". Keep in mind that this was not done in private but across the room at the bank, therefore letting everyone in the room know that I wanted a (fairly) large sum of cash.

It was at this time that the faux hawk sporting manager said 'nope'. He told me (still across the room BTW) that they operated on some automatic withdrawal machines and that he couldn't authorize that much of a withdrawal because other people needed to use it and that the amount of capital wouldn't cover it.

In shock I asked when they (the bank!) would be getting more capital, he said that they got more nightly. So I asked if I could come get the amount I wanted tomorrow. He said 'no' again. Apparently these machines had enough money for me but they didn't want to give it to me because someone else might need it (the bank is open for 10 more minutes).

The manager let me know that I could try a 'traditional' WaMu branch as they have 'more leniencies' with the withdrawal amount. Keep in mind that those are at least 3 miles (over 30 minutes in San Francisco) away.

I then asked the teller very plainly... "Are you saying that I can't have MY money?"

She said "yes".

Beyond mad I ripped up my withdrawal slip and left the bank. I have two out standing checks (IRS and State) with WaMu, when they clear I am OUT. I can't think of anything more ridiculous than not being able to get my money. Aren't there some rules about that?

I guess that the good thing to come of all this is that there can't be a run on the banks because even if everyone tried to get their money... the banks will not give it to you!

Thought this was something that you might find interesting!
Thaddius

Any bankers want to explain how this works?

(Photo:Stirwise)

"Nothing of this scale has happened since the Great Depression," Chief Executive Kerry Killinger said at WaMu's annual meeting. "This is the toughest credit cycle I have seen in my years in the industry."

A Loss and a Shake-up at Washington Mutual [NYT]
(Photo:Maulleigh)