Back in the day, WaMu was one of the fasted growing mortgage originators and was affectionately known as the lender of last resort to mortgage brokers. Their appropriate “Power of Yes” advertising campaign was particularly accurate.

Implode-O-Meter reports that:

>Washington Mutual will announce later today they are backing out of Wholesale entirely, and Retail is retreating to the bank footprint. Expect an email blast to Brokers later today.

>Word is “They will leave the retail division in Jacksonville & Downers Grove” and all wholesale deals must close by June 30th.

>It appears there may have been some conditions attached to that $5 billion.

Last week they reportedly allayed investor concerns that they were receiving a cash infusion of $5B.

I believe there are only a handful of national lenders left that are providing wholesale mortgage products in significant quantity. With this trend unfolding, combined with Fannie Mae’s upcoming ban on appraisal ordering by mortgage brokers, the high fees and unfavorable rates of jumbo conforming mortgages, a return to more core lending practices, proposed mortgage broker legislation, it’s not a good time to be a mortgage broker.

The mortgage bankers association expects the industry to contract in the current regulatory environment. There are many good mortgage brokers out there, but the profession needs weeding out, not unlike appraisers and real estate agents.

There is no love lost between WaMu and me because of the poor way it treated its long-time residential appraisers in 2006.

My question is: how will WaMu make money now? I had assumed wholesale mortgage origination was a big part of their business and their growth was fueled by mortgage origination. Their servicing business must be very lucrative.

UPDATE: Consolidation effort to eliminate 3,000 jobs
UPDATE 2: WaMu: Only for the Bravest of Investors