SAN DIMAS, Calif. – WesCorp FCU this afternoon reported a massive $538 million loss for the month of June, due to $541.1 million of other-than-temporary impairment charges recorded on its mortgage securities.
The losses come as WesCorp members are continuing to lobby NCUA for the return of any surviving portion of the $2 billion in capital they charged off in the corporate after NCUA took it under conservatorship on March 20.
The vast majority of the impairment charges came from securities that had already experienced prior credit impairment and had further credit deterioration. The OTTI on securities previously impaired represented $519 million. Only $22 million of OTTI came from securities that were not previously impaired.
The bulk of the impairment continues to be generated by the Option ARM sector and to a lesser extent from the Alt A sector. Approximately 70% of the new OTTI amount is from the Option ARM sector, with about 11% from Alt-A. Of the total OTTI taken to date, $4.7 billion or 77% comes from Option ARMs.
To date WesCorp has taken a total OTTI of $6.1 billion.
