Mortgage mess claims another victim

My wife and I banked at Washington Mutual until about a month ago. But as things began to look worse and worse for the bank, and as we saw WaMu closing branches at an astonishing rate, we decided to switch banks.

Earlier this week, of course, WaMu became the latest large financial institution to fail. Nothing would have happened to our money had we kept it with Washington Mutual, of course. But, still, I prefer my bank to be on solid ground. (Besides, there were certain things about the bank that bugged me. I’ll get to those later.)

The big reason behind WaMu’s failure is no surprise: Its home-loan business sunk the bank. WaMu had way too much in mortgage-related losses, and it overwhelmed the bank.

It’s getting scary to open the newspaper these days. It seems as if there’s always at least one more bank or financial institution going under thanks, in large part, to the housing slump. And personally, I don’t place much faith in the government — even if legislators do pass their big bailout plan — to be able to solve the problems.

The time to solve the mortgage crisis has long since passed. The reasons behind the mortgage mess are simple: Mortgage professionals gave out too many home loans to people who had no realistic ability to make their mortgage payments. Loan officers were passing out loans to borrowers with bad credit, high debt and low or unverifiable monthly incomes.

There’s a mistaken belief in this country that everyone should own a home. The truth is, some people are far better off renting. There should be no shame in renting. Heck, renting probably sounds good to many homeowners who have discovered that their homes today aren’t worth what they paid for them. This notion that homeownership is a right, has directly led to relaxed lending standards, which, of course, led to the high number of loan mortgage loan defaults and foreclosures that are now sweeping the country.

On a side note, there was one thing about our Washington Mutual branch that drove me crazy. The tellers were so incredibly chipper and happy every day. (I have a feeling this sheer joy at being a teller was mandated as part of WaMu’s “cool” image, just like the polo shirts they wore instead of shirts and ties.) I swear, I could have told my teller that I’d just lost my job and my dog had just died and she would have spit out, “Hey, that’s great! Have an awesome day!”

And those woo-hoo commercials? Obnoxious. In fact, there’s something about bank commercials that annoys me: At heart, there’s really no difference between one bank and the next. They all do the same thing. They can all scream about “truly free checking” all they want, but does anyone really care so much about, say, Chase, that they’d never bank anywhere else?