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8 Bad Business Decisions
By siliconindia
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Thursday, 15 September 2011, 00:01 IST |
1 Comments
Being Greedy
Washington Mutual (WaMu) was once the 'everyone's Bank' of America. It primarily built its realm on savings and loans, including sub-prime mortgages. The difficulty with these mortgages is that people sign them mainly for attractive introductory rate. After a year, the introductory rates may give way to normal price. People are no longer able to meet the rate and the loan defaults. WaMu did the mistake of ever increasingly signing people (A disastrous decision). The going soon became touch as the subprime mortgage crisis took hold and WaMu found itself with a staggering inventory of foreclosed homes. The company suffered a stock value plunge and a 10 day bank raid which dried up its liquid assets. The Federal Deposit Insurance Corporations soon seized the company as it completely went bankrupt.
