S&P cuts WaMu outlook to negative

Standard & Poor's said it revised its outlook on Washington Mutual Inc. and Washington Mutual Bank to negative from stable.

At the same time, the agency said it affirmed the BBB- long-term and A-3 short-term counterparty credit ratings on WaMu and the BBB long-term and A-2 short-term counterparty credit ratings on Washington Mutual Bank.

The outlook revision reflects the increasingly challenging housing and mortgage markets and their impact on WaMu's core mortgage franchise, the agency said, adding that WaMu faces additional regulatory scrutiny in the form of a memorandum of understanding with its primary regulator, the Office of Thrift Supervision.

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