UPDATE 2-WaMu faces $14 bln losses, should be shorted-GS

(Adds Goldman's role in capital-raising, Washington Mutual unavailable for comment; updates shares)

By Jonathan Stempel

NEW YORK, April 11 (Reuters) - Washington Mutual Inc (WM.N: Quote, Profile, Research) may have to set aside $14 billion this year for credit losses, according to a Goldman Sachs analyst, who also took the rare step of urging investors to sell the shares short.

The largest U.S. savings and loan, also known as WaMu, may lose $3.30 per share this year, and not turn a profit until 2010, analyst James Fotheringham wrote on Friday.

Fotheringham previously estimated a 2008 loss of $1.00 per share. He cut his forecast for 2009 earnings to break-even from a profit of $1.10 per share. He has a "sell" rating on WaMu, and cut his price target to $10 from $12.

In afternoon trading, Washington Mutual shares were down 59 cents at $10.83 on the New York Stock Exchange.

Keefe, Bruyette & Woods Inc analyst Frederick Cannon last week also projected WaMu would not be profitable before 2010.

On Tuesday, WaMu said it raised $7 billion from investors led by private equity firm TPG Capital LP [TPG.UL], which took a $2 billion stake. The infusion eased concern about the thrift's capital.

But WaMu also projected a first-quarter loss of $1.1 billion, or $1.40 per share, and nearly doubled its forecast for quarterly credit losses to $3.5 billion. It also plans to cut 3,000 jobs, close 186 home lending offices, and stop making mortgage loans through brokers.