By PETER S.GOODMAN and GRETCHEN MORGENSON


SAN DIEGO, California - As a supervisor at a Washington Mutual mortgage processing center, John D.Parsons was accustomed to seeing baby sitters claiming salaries worthy of college presidents. He rarely questioned them. A real estate frenzy was under way and WaMu, as his bank was known, was all about saying yes.

Yet even by WaMu’s relaxed standards, one mortgage four years ago raised eyebrows. The borrower was claiming a sixfigure income and an unusual profession: mariachi singer.

Mr.Parsons could not verify the singer’s income, so he had him photographed in his mariachi outfit. The photo went into a WaMu application file. The loan was approved.

“I’d lie if I said every piece of documentation was properly signed and dated,”Mr.Parsons said.

On a financial landscape littered with wreckage, WaMu, based in Seattle, Washington, stands out as a singularly brazen case of lax lending. By the first half of this year, the value of its bad loans had reached $11.5 billion, nearly tripling from $4.2 billion a year earlier. Its collapse in September was the biggest bank failure in American history.

Interviews with former employees, mortgage brokers, real estate agents and appraisers reveal the relentless pressure to churn out loans. Their accounts are consistent with those of 89 former employees who are witnesses in a class action filed against WaMu in federal court in Seattle by former shareholders.

According to these accounts, pressure to keep lending came from the top, where executives profited from the swift expansion - not least, Kerry K.Killinger, who was WaMu’s chief executive from 1990 until he was forced out in September. Between 2001 and 2007, he received compensation of $88 million, according to the Corporate Library, a research firm. He declined to respond to questions.

During Mr.Killinger’s tenure, WaMu pressed sales agents to make loans while disregarding borrowers’incomes and assets, former employees said. The bank gave mortgage brokers handsome commissions for selling the riskiest loans, which carried higher fees, bolstering profits and ultimately the compensation of the bank’s executives. WaMu also pressured appraisers to provide inflated property values that made loans appear less risky.

“It was the Wild West,”said Steven M.Knobel, a founder of an appraisal company, Mitchell, Maxwell & Jackson, that did business with WaMu until 2007.“If you were alive, they would give you a loan. Actually, I think if you were dead, they would still give you a loan.”

Some WaMu employees who worked for the bank during the boom now have regrets.

“It was a disgrace,”said Dana Zweibel, a former financial representative at a Wa- Mu branch in Tampa, Florida.“We were giving loans to people that never should have had loans.”Whenever she doubted that a customer could pay, supervisors directed her to keep selling, she said.“We were told from up above that that’s not our concern,”she said.

WaMu underscored its eagerness to lend with an advertising slogan:“The Power of Yes.”“We joked about it a lot,” said Sherri Zaback, a former mortgage screener who worked for Mr.Parsons in San Diego. When an application would be marked problematic but then somehow be approved, she said,“We’d say:‘O.K.! The power of yes.’”

By the time of WaMu’s annual meeting in Seattle in April, the bank had posted a first-quarter loss of $1.14 billion, and its stock had lost more than half its value in the previous two months. Weeks later, with WaMu in tatters, directors stripped Mr.Killinger of his board chairmanship. In September, he was forced to retire.

Later that month, with WaMu buckling under roughly $180 billion in mortgagerelated loans, regulators seized the bank and sold it to JPMorgan Chase for $1.9 billion, a fraction of its peak valuation of $40 billion. Billions that investors had sunk into WaMu were wiped out, as were prospects for many of the bank’s 50,000 employees. But Mr.Killinger still had his millions, rankling laid-off workers and shareholders alike.

“Kerry has made over $100 million over his tenure based on the aggressiveness that sank the company,”said Vincent Au, president of Avalon Partners, an investment firm that did business with WaMu.“How does he justify taking that money?”