Wachovia quits offering risky mortgage loan

Source: Yahoo Finance

CHARLOTTE, N.C. (AP) -- Beleaguered consumer bank Wachovia Corp. said Monday it will quit offering a mortgage payment option that allows borrowers to pay less each month than the bank charges in interest.

The choice to pay less was one of the options of Wachovia's controversial Pick-A-Payment mortgages, which offer customers four different payment options each month. Wachovia said it will no longer offer the less-than-full interest payment option on all new home loans.

Wachovia also said it is waiving all prepayment fees associated with its Pick-A-Payment mortgages.

Critics have said paying less than the amount of interest charged can lead to negative amortization. That means the borrower owes more than the value of their home, increasing the chance of foreclosure.

Read more: http://biz.yahoo.com/ap/080630/wachovia_mortgages.html

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Here's something good that's come out of this mess!

with interest rates. Leagad thugs.

Banks usually don't like having a lot of REOs.

for most of their customers.