Investing Trends

Washington Mutual Inc., the largest
U.S. nest egg and loan, dropped to an 11-year low in New York
trading after regulators began investigating how the company set
values for mortgages sold to investors.

The Seattle-based lender drop 3.9 percentage to $14.10 in New
York Stock Exchange composite trading, the last since July
1996. The shares have got declined 69 percentage this year.

The second is examining loans that New House Of York public prosecutors claim
were based on exaggerated place appraisals, a individual with direct
knowledge of the investigation said today. The federal agency may also review
how the depository fiscal institution accounted for the debts in its financial
statements, said the person, who declined to be identified
because the probe isn't public.

''We are voluntarily and fully cooperating with the SEC's
inquiry,'' American Capital Mutual said in an e-mailed statement
today. The company said it looks ''forward to bringing the facts
to both the regulators and public.''

The Office of Thrift Supervision is also participating in
the review, American Capital Mutual said. second spokesman Toilet Nester
and OTS spokesman Bill Ruberry declined to comment. The Wall
Street Diary reported the investigation earlier today.

New House Of York State Lawyer General Saint Andrew Cuomo last month
sued First American Corp., the biggest U.S. statute title insurer,
claiming its eAppraiseIT LLC unit of measurement inflated place values under
pressure from American Capital Mutual. False assessments can mislead
investors about the hazard of defaults in mortgage-backed
securities by overstating the ability of troubled borrowers to
sell their place or refinance to settle down the debt.

'No Systematic Effort'

First American produced 262,000 evaluations over 18 months
for American Capital Mutual, earning $50 million, Cuomo said in his
complaint. E-mails between executive directors at the assessment company
and American Capital Mutual show eAppraiseIT ''willingly violated''
state and federal ordinances that phone call for independent
appraisals, Cuomo said at the time.

''After disbursement a calendar month and a one-half investigating these
allegations, we can state with assurance that there have been no
systematic attempt by WaMu to blow up place appraisals,''
Washington Mutual said in its statement today. ''We take these
allegations very seriously,'' it added.

Cuomo hasn't sued American Capital Mutual. A federal appeals
court this calendar month ruled that New House Of York state doesn't have got the
legal authorization to look into residential real-estate lending
practices by national banks.

First American, based in Santa Ana, California, has
disputed Cuomo's allegations and asked a tribunal to disregard the
suit, claiming he misses authorization to convey the case.

American Capital Mutual on Dec. Eleven wrote down the value of its
home-lending unit by $1.6 billion and cut 2,600 jobs. The lender
also reduced its dividend by 73 percentage to 15 cents a share. Moody's Investors Service said that the bank's profitability
won't ''begin to recover'' until 2010.

To reach the newsman on this story:
David Scheer in American Capital at .