NEW YORK - JPMorgan Chase & Co. Inc. came to the rescue of ailing Washington Mutual Inc. Thursday, buying the ailing thrift's banking assets after WaMu was seized by the Federal Deposit Insurance Corp. This is the second time in six months that JPMorgan Chase has taken over a major financial institution crippled by bad bets in the mortgage market.

The deal will cost JPMorgan Chase $1.9 billion, and the bank said in a statement it planned to write down WaMu's loan portfolio by approximately $31 billion. JPMorgan Chase, which acquired Bear Stearns Cos. last March, also said it would sell $8 billion in common stock to raise its capital position.

The FDIC, which insures bank deposits, said it would not have to dip into the insurance fund as a result of the seizure. There had been concerns that the fund, which took a big hit after the seizure of IndyMac Bank, could be depleted by a WaMu seizure.

The Seattle-based WaMu has roughly $310 billion in assets and was searching for a lifeline after piling up billions of dollars in losses due to failed mortgages. WaMu has seen its stock price plummet by 87 percent this year, and it suffered a ratings downgrade by Standard & Poor's earlier this week that put it in danger of collapse.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

WASHINGTON (AP) - Ailing Washington Mutual Inc. has expanded its circle of possible suitors to private-equity firms as the nation's largest thrift scrambles to find a savior following another ratings downgrade and questions about its future.

The Bush administration's proposal for a $700 billion bailout for distressed financial institutions may have given fresh impetus to a possible buyout and new allure to Washington Mutual. But some potential suitors may be waiting to see if they can snap up only WaMu's deposits and branches, as opposed to its troubled mortgage holdings, if the government were forced to seize the thrift.

Late Thursday, The Wall Street Journal reported that JPMorgan Chase & Co. had struck a deal to acquire WaMu's deposits and some of its branches.

The paper, citing people familiar with the matter, said the deal brokered by the government will not impact the FDIC insurance fund.

Calls to JPMorgan and WaMu spokesmen and federal regulators were not immediately returned, but JPMorgan scheduled a conference call for 9:15 p.m. ET Thursday.

Ravaged by losses from soured mortgages, WaMu has seen its stock price plummet by 87 percent this year.