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Class Action Suits Hit WaMu

December 31, 2001

Washington Mutual • WaMu Bank • WaMu Mortgage • Refinancings • Home Equity Loans • Construction Loans --- News • WaMu Buys Providian • Class Action Filed

Not too long ago, Washington Mutual was a small savings and loan in Seattle. Then it went on a voracious acquisition spree, devouring 20 other companies and expanding into new businesses including investment advice, insurance and consumer banking.

Today WaMu is the No. 1 home lender and manages more than 200,000 investment accounts. It's also acquiring a growing portfolio of consumer class action suits.

One of the suits, expected to be filed this winter, charges that since WaMu bought Bank United of Houston, it has been gouging customers with late fees that are too high or unjustified. WaMu claims it "inherited" the practices with its purchase of Bank United.

Another suit charges that agents of WM Financial Services, WaMu's stock brokerage house, routinely prey on elderly bank customers, convincing them to move their FDIC-insured savings accounts into uninsured bond funds. The agents use WaMu bank records to identify likely prospects, the suit alleges.

WaMu's most recent acquisition is Homeside Lending, the U.S. mortgage unit of National Australia Bank Ltd. (NAB). The transaction is expected to be completed in January 2002. WaMu will be taking over about $187 billion in mortgages representing about 2 million customers.

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