Wachovia Earnings Tumble - Are Option ARMs To Blame?

Wachovia earnings today fell dramatically 49 cents below expectations, an $8.9 Billion loss, and a cut of the dividend by 87%. Wachovia earnings release also mentioned they are no longer operating a mortgage wholesale lending division.

Wachovia is not the first bank to close the door on mortgage brokers. Bank of American did so a few months back as well.

This is a clear signal that Wachovia feels the mortgage brokers who aggressively sold their “Option ARM” products…the product they inherieted from their acquistion of World Savings…is to blame.

Feel free to read our Wachovia Mortgage Review, if you are thinking a getting a loan directly from them.

The company needs to cut expenses so they also annouced job cuts are coming.

Here’s video recorded today…July 22, 2008 discussing Wachovia earnings tumbling cause the dollar to weaken…enjoy. As I stated above, Wachovia earnings destruction is from the exposure to the California market and the Option ARMs.

Author: Rob K. Blake
Published July 22, 2008

• Previous post in Mortgage News:
  Citizens Bank Showing Signs of Trouble

• Next post in Mortgage News:
  Housing Bill With GSE Bailout Goes To House Today