Washington Mutual Drops Annual Fee on Personal Equity Manager Product, Adds Longer-Term Feature; Making It One of the Most Flexible Home Equity and Mortgage Products Currently Available

Business Wire, June 1, 2005

SEATTLE -- Washington Mutual (NYSE:WM), one of the leading retailers of financial services, has dropped the annual fee for its Personal Equity Manager(TM) product and has lengthened the fixed-rate option up to a 30-year term -- making it one of the most flexible home equity and mortgage products currently available.

"For many individuals, their home is one of the most important financial assets they have and the Personal Equity Manager product allows them to manage this asset with the interest rate and payment options that best work for them," said Kenneth Kido, president of retail bank products and operations at Washington Mutual. The Personal Equity Manager product is a two-in-one loan that can stand alone as a flexible line of credit or also allow customers to purchase or refinance a home with the ability to tap into their home equity at a later date.

"Overall, the product gives customers more control in managing their monthly payments and cash flow, particularly since borrowers can choose between fixed and variable rates as their financial needs or interest rates change," added Kido.

First mortgage now available up to a 30-year term

Additionally, borrowers using the Personal Equity Manager product as a first-lien mortgage when purchasing a new home or refinancing an existing one can now choose a fixed-rate loan option up to a 30-year term rather than the former 20-year term limit. The longer term makes the Personal Equity Manager product an alternative to a traditional mortgage loan.

With Washington Mutual's Personal Equity Manager product, customers also have more flexibility in setting the terms of their fixed-rate loans and can choose terms in one-year increments. For example, a borrower may choose to finance a new home with a 30-year term at either a variable or fixed rate, and then later tap into their equity to pay for home improvements or other costs using terms not commonly available such as a three-, four- or seven-year fixed rate with set monthly payments.

Furthermore, borrowers can finance up to 90 percent of the value of their home with a maximum loan amount of $1 million. While Washington Mutual has dropped the annual fee -- which ranged from $45 to $65 depending on the region -- for maintaining a line of credit, initial closing costs still apply. Closing costs on the first-lien product, however, are lower than a traditional mortgage and generally average around $500.

Monthly statement summarizes all account activities

Borrowers, who receive monthly statements which summarizes all of their account activities, may exercise up to two fixed-rate loan options on their Personal Equity Manager loan within the calendar year, with up to five outstanding at any time. Furthermore, the process is streamlined and borrowers do not need to reapply in order to tap into their home equity -- with funds from the line of credit generally made available on the same business day. Likewise, the fee to set up a fixed-rate option is only $250, although the first one is free and there is no fee if a borrower is moving a fixed loan amount back to the variable line of credit.

"The end result is an innovative product that is likely the only home financing option many borrowers will ever need," said Jennifer Myhre, senior vice president, Home Equity Product Management.

About Washington Mutual

With a history dating back to 1889, Washington Mutual is a retailer of financial services that provides a diversified line of products and services to consumers and commercial clients. At March 31, 2005, Washington Mutual and its subsidiaries had assets of $319.70 billion. Washington Mutual currently operates more than 2,400 retail banking, mortgage lending, commercial banking and financial services offices throughout the nation. Washington Mutual's press releases are available at www.wamunewsroom.com.