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SEATTLE (AP) -- Washington Mutual Inc. said Friday a weak housing market and the recent crunch in the mortgage market will lead to a 75 percent drop in third-quarter net income at the national bank. Washington Mutual reported third-quarter 2006 net income of $748 million, meaning third-quarter 2007 net income is likely to fall to around $187 million. The decline in third-quarter income will mostly come from rising provisions for loan losses and writedowns of mortgages Washington Mutual currently holds. Washington Mutual's loan loss provision for the quarter will total $975 million. The company will also write down the value of various loans and portfolios by about $410 million. Analysts polled by Thomson Financial, on average, forecast earnings of 58 cents per share for the quarter ending Sept. 30. Rising delinquencies and defaults among mortgages, especially subprime loans given to customers with poor credit history, has led to the near disappearance of investors willing to buy the loans. Without an investor market, the value of the loans decreases, which has led Washington Mutual to cut the value of its portfolio.
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