"This was one area we thought would be a bright spot in guidance," wrote Harting. WaMu Chief Executive Officer Kerry Killinger also forecast new mortgages would decline in 2008, according to presentation notes. Credit rating agency Fitch Ratings lowered its outlook for WaMu to negative from stable on Tuesday, and said in a statement that market conditions will likely remain tough in 2008 for lenders with a strong reliance on mortgages and home equity credit. WaMu has scaled back its mortgage lending to borrowers with questionable credit, but the implosion of the subprime sector hit the company hard in the third quarter. WaMu missed Wall Street's earnings expectations and wrote down a reserve of $967 million – about six times bigger than a year ago – to prepare for new defaults on mortgages and credit card loans.