Wachovia, WaMu Say Credit Woes Might Hurt Earnings

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Two more major lenders are worried that the credit woes that continue to plague the financial services industry might take a bite out of their earnings. Wachovia and WaMu, which are two of the nation’s largest lenders, are concerned about losses related to crumbling credit conditions, due to consumers being behind on their credit cards.

Seattle-based Washington Mutual has fallen to sixth in U.S. mortgage lending from third in 2005, after it stopped making some riskier loans and eliminated nearly 11,000 jobs in 2006.

“Most housing markets appear to be weakening to us,” Killinger said. “We would not be surprised to see declines in housing prices in many regions of the country … for the next few quarters.”

Dozens of mortgage lenders have cut back lending or quit the industry in 2007, positioning rivals to add market share.

Almost no financial company has remained unscathed in the latest fiasco, except the few that remain fiscally conservative in their lending. The full extent of the debacle should be realized in the next six months.

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