WaMu replaces chief risk officer

Washington Mutual Inc. named a new chief enterprise risk officer Tuesday, as the nation's largest savings and loan struggles with the fallout of the mortgage and credit crises.

WaMu said John P. McMurray, formerly its chief credit officer, will replace Ron Cathcart in overseeing the company's credit risk, interest rate risk, market risk, operational risk and audit. He will report directly to Chief Executive Officer Kerry Killinger.

In a statement, the thrift said Cathcart left the company, but did not give further details. Spokeswoman Libby Hutchinson said Cathcart's departure was effective Monday.

McMurray joined WaMu in August 2007 from Countrywide Financial Corp., where he also served as chief risk officer.

Countrywide, the nation's largest mortgage lender and servicer, saw its finances crumble as the housing market went south, mortgage defaults climbed and Wall Street moved away from buying and selling securities backed by mortgages. The company agreed in January to be bought by Bank of America Corp.

WaMu said McMurray has also served in senior leadership positions responsible for credit risk management for a number of mortgage-related companies, including Freddie Mac.

Risk management was top of mind for shareholders at WaMu's annual meeting earlier in April, where the resignation of Mary Pugh, the board member most responsible for overseeing the thrift's risk exposure, was announced.

Washington Mutual has been hit hard by the cost of rising delinquencies and defaults on mortgages and by the sinking value of its mortgage portfolio. Several times, the thrift has upped its guidance for how much it must set aside to cover bad loans, and it recently announced a $7 billion cash infusion from a private equity group and existing institutional investors.

Some shareholder groups have accused WaMu of making loans to people with less-than-stellar credit despite signs that the housing market was bound to collapse. The company has responded that it took appropriate steps early on to mitigate that risk.