WaMu goes down

And yet another one bites the dust. Washington Mutual was last week’s casualty in a financial saga that has seen Lehman Brothers and IndyMac driven out of business, and that has led to the hastily arranged rescues of Merrill Lynch and Bear Stearns.

In what is by far the largest bank rescue in U.S. history, federal regulators seized WaMu and struck a deal to sell the bulk of its operations to J.P. Morgan. WaMu’s breathtakingly swift collapse was triggered by a wave of deposit withdrawals as many investors – proving to be prophetically right – believed the end was near. The good news is that all WaMu depositors will have access to their cash; the bad news is that holders of $30 billion in debt and all common shareholders will end up with nothing.

To get an idea of how fast and furious WaMu’s fall from grace was, last September its stock was changing hands at $35 a share. In Friday’s trading, it was changing hands at $0.16 a share, and that’s probably overvalued. The irony, if there is any, is that WaMu rejected a takeover offer from J.P. Morgan in March that valued the savings and loan at $4 a share.

Unfortunately, Washington isn’t doing much to assuage concerns of very nervous capital markets. The Bush administration wants Congress to authorize a $700 billion debt issue to allow the government to purchase collateralized debt obligations (CDOs) that banks can’t sell except at large losses, including mortgage-backed securities backed by poorly performing loans. While Democrats say the plan should include direct help for troubled borrowers and protections for taxpayers, some Republicans want any government program to be aimed solely at unfreezing the credit market’s institutions. As of week’s end, the two sides were at an impasse.

Eric P. Egeland
RE/MAX UNITED
847.337.7090
DeerfieldsAgent.com

Deerfield Transactions Feb. 23-27th

Single Family Homes

New Listings
665 ORCHARD AVE Deerfield 3 Bed 2 Bath $449,000 2/25/2008
962 CENTRAL AVE Deerfield 5 Bed 3.1 Bath $989,000 2/26/2008
1116 Linden Deerfield 4 Bed 4.1 Bath $1,049,000 2/25/2008

Under Contract
1030 springfield AVE Deerfield 3 Bed 2 Bath $395,000 2/25/2008
1363 Woodland DR Deerfield 5 Bed 5.2 Bath $1,949,000 2/27/2008

Price Changes
1639 VILLAGE GREEN CT Deerfield 4 Bed 2.1 Bath $549,900 $549,000 2/27/2008
1444 GREENWOOD AVE Deerfield 3 Bed 1.1 Bath $595,000 $635,000 2/25/2008
1000 North AVE Deerfield 4 Bed 2.1 Bath $759,000 $735,000 2/26/2008
262 BRISTOL CT Deerfield 4 Bed 2.1 Bath $839,000 $810,000 2/27/2008
622 Appletree CT Deerfield 4 Bed 2.1 Bath $869,000 $859,000 2/23/2008

Pending
916 Forest AVE Deerfield 2 Bed 1 Bath $359,900 2/23/2008


Attached Homes

New Listings
960 Inverrary LN 960 2 Bed 1.1 Bath $189,000 2/25/2008
546 South Commons CT 506 2 Bed 2.1 Bath $459,900 2/27/2008
501 KELBURN 501 3 Bed 2.1 Bath $495,000 2/25/2008
709 Central AVE 709 3 Bed 3.1 Bath $599,900 2/24/2008

Under Contract
821 Fountain View DR 821 3 Bed 2.1 Bath $699,000 2/26/2008

Price Changes
714 Inverrary LN 0 2 Bed 1.1 Bath $195,000 $189,000 2/26/2008
754 Inverrary LN 0 2 Bed 1.1 Bath $189,650 $189,600 2/25/2008
1156 OSTERMAN AVE 56C 1 Bed 1 Bath $194,900 $189,900 2/24/2008
441 Elm 3B 2 Bed 2.1 Bath $214,900 $205,000 2/27/2008
427 GROUSE 427 4 Bed 2.1 Bath $255,000 $246,000 2/25/2008
394 MILFORD RD - 3 Bed 2.1 Bath $509,000 $495,000 2/24/2008
347 Milford RD 347 3 Bed 2.1 Bath $509,000 $499,000 2/25/2008

Closed
447 PARTRIDGE LN NA 3 Bed 2.1 Bath $285,900 $280,000 2/25/2008


Eric P. Egeland
RE/MAX ADVANCED
847.337.7090
DeerfieldsAgent.com