From my experience, WAMU has been the most vigilant client I’ve had over the last several years as far as qualifying their clients. In addition, very strict appraisal guidelines with an internal appraisal staff department and very selective contract fee appraiser list.

I’m sure there are bad loans on the books, possibly from the many bank purchases they have made, but their main wholesale and retail division, which probably accounts for the majority of their volumn (anyone care to verify this), is probably the most sound loan portfolio in the industry.

From the thousands of REO and NOD properties I’ve noted in the last year, I only recall several from WAMU or Long Beach.

Powayseller, what makes you so sure this is a good short? With a 5% yield I would be consider buying this now.

You DO know that if you short this, you are on the hook and have to pay the person you borrowed the shares from the $2.08/share dividend right?