Moody's Investors Service cut Washington Mutual's credit rating today and said that the mortgage firm will need at least an additional $4 billion more than it expected to compensate for the bad mortgages it has in its portfolio in 2008. The rating agency stated that its action shows a rapid deterioration of the housing sector in the first few months of this year, which was the same reason Standard & Poor's used to cut WaMu's ratings a week ago. WaMu has projected that it will write-down up to $8 billion this year on account of borrowers who can't make their mortgage payments. Resulting fiscal-year losses could remove the cash cushion that keeps the mortgage company in compliance with regulations, Moody's stated in its release. Moody's brought down WaMu's senior unsecured rating to 'Baa3' from 'Baa2.' It also cut Washington Mutual Bank's long-term deposit rating to 'Baa2 from 'Baa1.'
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