Report: U.S. seizes Washington Mutual

SEATTLE, Sept. 25 (UPI) -- The U.S. government Thursday took over struggling savings and loan Washington Mutual in the largest bank seizure in U.S. history, officials said.

The government has begun selling off pieces of the institution to JP Morgan Chase in what The New York Times, citing people briefed on the plan, called an emergency transaction intended to protect taxpayers from being saddled with a bill for another bank.

Analysts had said a sale of Washington Mutual, one of the worst-hit casualties of the housing crisis, could involve losses of $30 billion. Washington Mutual had said it intended to remain independent, and had hired Goldman Sachs last week to help locate buyers, the Times said.

The company's share values have fallen 83 percent on the year, reaching $2.26 a share Wednesday.

Analysts said Citigroup, HSBC, Banco Santander and Wells Fargo had also been considered potential buyers for Washington Mutual, which is based in Seattle.

Thursday's seizure was unexpected among Washington Mutual board members, who sources said had no knowledge the seizure was being planned.

The acquisition will give JPMorgan Chase branches in California and other markets where it does not currently operate, the newspaper said, but JPMorgan will also take on large number of troubled mortgages and commercial real estate.