Expected mortgage losses at Wachovia Corp. and Washington Mutual Inc. might not look as steep as those at rival lenders.

The reason: In recent weeks, Wachovia and WaMu have cited housing data from the Office of Federal Housing Enterprise Oversight when detailing their exposure to the U.S. housing market. A different index relied on by other banks, the S&P/Case-Shiller Home Price Indices, is gloomier.

•  The News: Wachovia and Washington Mutual are using housing-market data that might be less-negative than those used by other lenders.•  Contrast: The less-negative data are from Ofheo; the gloomier, from S&P/Case-Shiller.•  The Banks Say: WaMu says everything's disclosed publicly. Wachovia says Ofheo's data more closely resemble the bank's book of mortgages.

Wachovia in mid-April cited Ofheo to forecast that the U.S. housing crisis would end in "mid-2009" and that prices would fall an additional 6.8% before then, or 12.9% from their peak. Mid-April was when the Charlotte, N.C., bank reported a first-quarter loss and raised $8 billion; the bank Tuesday said its previously announced loss of $393 million, after preferred dividends, will widen to $708 million as a result of write-downs.

As Seattle-based WaMu posted a $1.14 billion net loss for the first quarter, Chief Executive Kerry Killinger used Case-Shiller data to show investors the magnitude of declines in housing prices. But when WaMu assessed the current value of properties backing its mortgages, WaMu used Ofheo data, the presentation's footnotes suggest.

Thomas Lawler, an independent housing economist who is a former official at mortgage lender Fannie Mae, noted that using one set of numbers instead of another in calculating loan-loss assessments makes "a huge difference."

Derek Aney, a WaMu spokesman, said the bank's forecasting methods "are publicly disclosed in detail."

A Wachovia spokesman said its Ofheo-based forecasts apply specifically to the bank's troubled $121 billion of option adjustable-rate mortgages, which allow borrowers to choose the amount of their loan payment and can result in an increased loan balance. He said Ofheo's data more closely resembles the bank's book of mortgages, which he said includes loans of "lower average loan size and higher average owner equity."

Wachovia's move troubled analyst Meredith Whitney at Oppenheimer & Co., who told clients in a note that she was "unaware of any financial institution that solely relies on Ofheo to formulate its loan-loss estimates." Wachovia had previously forecast a 20% price decline between mid-2007 and the end of 2008 alone, much closer to Case-Shiller's statistics.

Neither bank has been accused by regulators of intentionally diluting their estimates of future home-loan losses. Mark Zandi, an economist at Moody's Economy.com, said there is a "raging debate" over which index is more accurate.

Bank of America Corp. and Citigroup Inc. have said they use Case-Shiller data.

Some economists and researchers contend that Ofheo home-price data are thin in hard-hit markets like Florida and California, where Wachovia and WaMu each have about half of their home loans.

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