Maryland Real Estate Consultant

Rates are holding stable. I believe the economy will be stimulated with an increase of home sales in the coming months. Only time will tell.

On Monday it was rumored that a struggling Washington Mutual (WaMu) would be getting a cash infusion of $5 billion from a private equity firm to help it weather the subprime mortgage storm. On Tuesday that amount had morphed to $7 billion in additional capital from the sale of company stock.

The nation's largest savings and loan announced that TPG, Inc and a consortium of other investors were investing that amount in the company. WaMu, however, is far from out of the woods.

The company also announced that it will have a 1.1 billion quarterly loss and will undergo substantial job cuts.

Washington Mutual will close all of its 186 home loan offices and will no longer acquire home mortgages from brokers. The company will continue in the home lending business but all mortgages will be originated through its retail locations. Closing the offices and other cost cutting moves will eliminate 3,000 jobs although some of the mortgage workers will be offered positions in the retail locations.

The company will set aside $3.5 billion this quarter for anticipated loan losses, nearly twice what analysts had projected, and said charge-offs will amount to $1.4 billion. Losses in the fourth quarter of 2007 had totaled $1.87 billion.

 Former U.S. Federal Reserve Chairman Alan Greenspan told Spain's El Pais newspaper on Sunday that chances of the U.S. economy slipping into a recession were now above 50% but the world's leading economy had not yet entered one.

Greenspan said, "In my opinion recession is a period of a sharp correction and a rapid decline in activity across many sectors of an economy coupled with the domino effect of a strong rise in unemployment. We haven't seen that in the U.S. yet, but it could happen."