Washington Mutual Bank's offering documents for its Mortgage Pass Through Certificates might have contained misleading statements.

This is a securities class action lawsuit against Washington Mutual Bank, several of its subsidiaries and certain officers and directors.

Washington Mutual packaged into special purpose trusts the home loans it originated through its retail channel, wholesale channel and wholesale channels. These trusts then issued to investors certain Mortgage Pass-Through Certificates. The Mortgage Pass-Through Certificates were supported by pools of mortgage loans.

According to the complaint, the Registration Statement included false statements and/or omissions about:

(i) the underwriting standards purportedly used in connection with the origination of the underlying mortgage loans;

(ii) the maximum loan-to-value ratios used to qualify borrowers;

(iii) the appraisals of properties underlying the mortgage loans; and

(iv) the debt-to-income ratios permitted on the loans.

As a result, the Mortgage Pass-Through Certificates sold to investors were secured by assets that had a much greater risk profile than represented in the Registration Statement. In this way, defendants were able to obtain superior ratings on the tranches or classes of Certificates, when in fact these tranches or classes were not equivalent to other investments with the same credit ratings.

In 2008, the truth about the performance of the mortgage loans that secured the Mortgage Pass-Through Certificates began to be revealed to the public, increasing the risk of the Mortgage Pass-Through Certificates receiving less absolute cash flow in the future and the likelihood that investors would not receive it on a timely basis. The credit rating agencies also began to put negative watch labels on the Mortgage Pass-Through Certificate tranches or classes, ultimately downgrading many. As an additional result, the Mortgage Pass-Through Certificates are no longer marketable at prices anywhere near the price paid by investors.

The certificates at issue in this case are WaMu Mortgage Pass-Through Certificates Series 2006-AR1; WaMu Mortgage Pass- Through Certificates Series 2006-AR2; WaMu Mortgage Pass- Through Certificates Series 2006-AR3; WaMu Mortgage Pass- Through Certificates Series 2006-AR4 Trust WaMu Mortgage Pass- Through Certificates Series 2006-AR5; WaMu Mortgage Pass- Through Certificates Series 2006-AR6; WaMu Mortgage Pass-Through Certificates Series 2006-AR7; WaMu Mortgage Pass-Through Certificates 2006-AR8; WaMu Mortgage Pass-Through Certificates Series 2006-AR9; WaMu Mortgage Pass- Through Certificates Series 2006-AR10; WaMu Mortgage Pass-Through Certificates 2006-AR I 1; WaMu Mortgage Pass-Through Certificates 2006-AR12; WaMu Mortgage Pass-Through Certificates Series 2006-AR13; WaMu Mortgage Pass-Through Certificates Series 2006-AR14; WaMu Mortgage Pass-Through Certificates Series 2006-ARI5; WaMu Mortgage Pass-Through Certificates Series 2006-AR 16; WaMu Mortgage Pass-Through Certificates Series 2006 -AR17; WaMu Mortgage Pass-Through Certificates Series 2006-ARI8; WaMu Mortgage Pass-Through Certificates Series 2006-AR19; WaMu Mortgage Pass-Through Certificates Series 2007-HY1; WaMu Mortgage Pass-Through Certificates Series 2007-HY2; WaMu Mortgage Pass-Through Certificates Series 2007-HY3; WaMu Mortgage Pass-Through Certificates 2007-HY4; WaMu Mortgage Pass-Through Certificates 2007-HY5; WaMu Mortgage Pass-Through Certificates Series 2007-HY6; WaMu Mortgage Pass-Through Certificates Series 2007-HY7 Trust.