The United States' largest savings and loan association, Washington Mutual, said through its Chief Executive Kerry Killinger on Monday that a "near perfect storm" has caught the U.S. housing market. Killinger said the company anticipates a continued rise in bad loans, which will take a toll on WaMu's earnings and force the company to set aside more money to cover them.

Killinger made the comments at the Lehman Brothers Holdings Inc. financial services conference and estimated the bank may have to increase its loan-loss provision by $500 million, from an already announced provisions of $1.5 billion to $1.7 billion for the full year, according to Bloomberg.

"The combination of rising delinquencies, higher foreclosures, more housing inventories, increasing interest rates on many mortgages and greatly reduced availability of mortgages due to limited liquidity is creating what we call a near-perfect storm for housing," said Mr. Kerry Killinger, as quoted by Bloomberg News and Reuters. "It now appears that housing and capital market corrections will be worse and longer lasting than even we expected," Killinger said.

However, Killinger also pointed out that the harsh market environment will take down its smaller and weaker competitors and eventually the company will overcome the market crisis.

Washington Mutual has been around for more than a century, as it has been founded as the Washington National Building Loan and Investment Association in 1889. It now has more than 60,000 employees and revenue of around $16 billion.

Countrywide Financial Corp., which is the largest mortgage lender in the United States, announced few days ago substantial job cuts of up to 12,000, which is around 20 percent of its 60,000 strong workforce. IndyMac Bancorp, which is the second-biggest home lender in the U.S. after Countrywide, announced the elimination of about 1,000 jobs, or 10 percent of its workforce, in the near future. The National City Corporation and Lehman Brothers also announced layoffs this week, bringing last week's total to more than 15,000 job cuts in the lending business.