SEATTLE, May 7, 2003 (BUSINESS WIRE) -- Washington Mutual, Inc.
(NYSE:WM) announced today that it has reached a significant milestone
with year-to-date sales by its subsidiaries of more than $10 billion
in Fannie Mae 1/4-coupon mortgage backed securities (MBS).
"This is a tremendous development and indicates the capital
markets are ready to evolve toward more efficient MBS execution," said
Marito Domingo, executive vice president of Capital Markets for the
Home Loans & Insurance Services Group at Washington Mutual. "The
greater acceptance of 1/4-coupon MBS demonstrates their viability in
A 1/4-coupon more closely aligns the MBS coupon with the rate on
the underlying mortgage loans, resulting in greater predictability for
prepayment speeds. This, in turn, delivers better value to the MBS
The ability to sell MBS in 1/4-coupon increments also allows for
easier management of excess servicing fees and, ultimately, a
servicer's mortgage servicing rights (MSRs). The prevailing industry
practice of selling MBS in 1/2-coupon increments typically requires
the servicer of the mortgage loans to retain excess servicing fees,
which results in unnecessary volatility for the servicer.
"A 1/4 coupon MBS is a natural financial evolution in a market
that has grown increasingly broad and sophisticated," continued
Domingo, "and it expands the range of alternatives for the MBS
About Washington Mutual
With a history dating back to 1889, Washington Mutual is a
national financial services company that provides a diversified line
of products and services to consumers and small- to mid-sized
businesses. At March 31, 2003, Washington Mutual and its subsidiaries
had consolidated assets of $276.97 billion. Washington Mutual
currently operates more than 2,500 consumer banking, mortgage lending,
commercial banking, consumer finance and financial services offices
throughout the nation. Washington Mutual's press releases are
available at www.wamu.com.
SOURCE: Washington Mutual
P. Kevin Horn, 206/377-3268
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