Wachovia Mortgage Review

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Wachovia Mortgage Corp is a division of the Parent Company, Wachovia Corp headquartered in Charlotte North Carolina. Wachovia Corp became the fourth largest US banking operation when it merged with First Union in 2001.

Wachovia Mortgage Corp

We, years ago, had a broker relationship with Wachovia Mortgage as we had followed a very bright account executive who had recently switched companies. However, he wasn’t there long (less than 6 months if I remember) and it wasn’t like him to hop from company to company.

This gave me reason for concern about Wachovia Mortgage. The one loan we submitted took way to long to get approved and I can remember personally visiting the office at 4 pm to pick up the file to transfer to another lender only to find the office in chaos with no one to locate the file. I had to call my rep who was now working elsewhere to intervene on my behalf.

That is no way to run a mortgage wholesale lending company.

Wachovia Buys World Savings – Simply Stupid!

It wasn’t much later when Wachovia acquired Golden West Financial Corp…the parent of World Savings. If you’ll recall World Savings along with Downey Savings were the premier “Pick-A-Payment” or “Option ARM” specialists. This program many believe is responsible for single-handedly creating the California real estate bubble.

The Option ARM (if you’ll remember when I first published a scathing indictment of the type of mortgage July of 2006), I called once upon a time simply “The Dumbest Mortgage Ever” due to it’s negative amortization element when a borrower elected to pay the “minimum payment” option.

Wachovia Now

Wachovia now is hemorrhaging money partly due to the losses of the mortgage crisis which came about by their aggressively pursuing the most profitable albeit risky mortgage products -the Option ARMs. With the acquisition of Golden West and Westcorp, their California exposure was and still is very high.

Recently the CEO, Ken Thompson got ousted in favor of former Treasury Undersecretary Robert K. Steel. I find it suspect they go after a politician to run their weakening company.

Are they concerned impropriety will be discovered in what will surely be investigation after investigation as the mortgage crisis unravels? Wachovia Securities…their investment division in St. Louis was recently raided by the Missouri Secretary of State investigators.

Time will tell.

Here’s a video recorded on July 11,2008 discussing some financial challenges they face today…enjoy!

Good Luck!

Update: A Wachovia Bank buyout of their depositor branch banking operations to Citigroup was announced on September 29, 2008.

Update 2/15/2009: 60 Minutes aired the story of Paul Bishop, a former loan salesman turned whistleblower, which focuses on the “Dumbest Mortgage Ever”…the Option ARM that made both World Saving and Downey Savings rich and infamous.

Of course, “pick a payment” option ARMs are single handedly responsible for huge segment of California, Arizona, and Nevada foreclosures. It’s not coincident these loans were aggressively marketed in these three States…and those State boast the countries highest foreclosure rates.