Thank you very much, Senator Coburn.

Do you remember those problems at Long Beach in 2003, Mr. Killinger?

We have to do some financial reform in the Senate.

Had there been a surge of loans that had to be repurchased as well?

Purchasers of these securities are relying on you as an underwriter to provide truthful information.

At least that was the goal.

Some of the other products being high-risk products.

No, when there was fraud, what you do is reward the folks that are being investigated with trips.

I think you would agree, contributed to the reduction in the criteria--the loosening of the criteria for these products.

Our Home Loan group should complete its repositioning within the next 12 months.

Now, this high-risk strategy of WaMu, the shift from low risk to high risk, was first implemented in 2004.

It is very clear, you should have been disturbed by that.

Not effective. That is what you were told.

We are contemplating selling a larger portion of our Option ARMs than we have in the recent past.

Why were so many Long Beach mortgages defaulted? Why were Long Beach securities consistently among the worst performing in the marketplace?

So they indicated they would make changes.

Do you think your investors should be troubled by that? Should your stockholders, should anybody be troubled by that except us?

Those Option ARMs... now have a delinquency rate of more than 50 percent, which means more than half of the underlying loans are now delinquent.

Were they notified that there was a billion-and-a-half dollars in loans that were selected because they were Option ARMs and that it was your expectation that Option ARMs were going to go delinquent in greater numbers?

You did execute on it for about a year, a year and a half.

The reason that Option ARM loans were selected is because they were most likely to go delinquent.

That is called a high risk to the business unit. Is that correct?

Did they know, were they informed that loans with those or some of those characteristics had a greater propensity towards delinquency in WaMu's analysis? Were they told that?

Is it fair to say that WaMu was not particularly worried about the risk associated with Long Beach subprime mortgages because it sold those loans and passed the risk on to investors?

Did you have concerns about the Option ARM?