What was Wamu thinking?

Most of my comments here are focused on macro issues -- the interest rate environment, the mortgage and housing outlook, etc. But I just have to share this anecdote because it illustrates all that's wrong with the mortgage lending world these days:

My wife and I have a 30-year fixed mortgage with Washington Mutual. We closed on the purchase-money loan in November 2004 when we bought our house. Since that time, long-term interest rates have risen about 60 basis points, per the Mortgage Bankers Association. In other words, there's no reason whatsoever we'd consider a rate-and-term refi.

But lo and behold, we got a solicitation call from Wamu last night asking if we were “happy with our payment” or something like that. It was clearly a sales pitch ... an attempt to get us to refinance to generate some business. Given the fact a R&T refi would make zero sense, the only possible conclusion is that Wamu was calling to get us to refi into some other kind of mortgage -- an interest only loan, an option ARM, or some other kind of higher-risk loan. I didn’t even let the guy go any further … and hung up.

I understand that lenders are in the business to make money. And I can fully understand why they’d bother me at dinner time IF rates were falling — you don’t want your borrower to refi out from under you with the guy down the street if he can save money by refi-ing with you. But to try to hit me up to refi … when the interest rate climate is actually moving AGAINST me … that’s just wrong. What was Wamu thinking?