As Lenders Tighten Standards, Wachovia Dives in Deeper with more Exotic Loans

El Pinko

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Sun Feb-10-08 10:22 PM
Original message

As Lenders Tighten Standards, Wachovia Dives in Deeper with more Exotic Loans

http://www.charlotte.com/business/story/485479.html

Wachovia loans questioned
Bank stands by `Pick-A-Payment' mortgages as a flexible, sound option for customers
RICK ROTHACKER
rrothacker@charlotteobserver.com
At a time when many lenders are pulling back on nontraditional mortgages, Wachovia Corp. is diving in deeper.

The Charlotte bank argues that its "Pick-A-Payment" mortgage gives customers more flexibility to manage their personal finances. But the product, amid turbulent times in the housing market, has drawn concern from the bank's investors, consumer advocates and even some employees.

Pick-A-Payment loans are part of a class of mortgage known as payment-option adjustable rate mortgages, or option ARMs. Consumer advocates contend the loans should be reserved for a select group of customers who can handle a jump in their future payments. A borrower's loan balance also can increase instead of shrink, a particular problem in markets with declining home values. Some competitors have stopped selling the loans or tightened standards.

Wachovia, which inherited the product through its 2006 Golden West Financial Corp. acquisition, contends that its loans differ significantly from competitors' and have numerous consumer safeguards.

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MadMaddie

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Sun Feb-10-08 10:24 PM
Response to Original message

1. When is this going to end. Wachovia and other similar companies

have wrecked the home industry and yet they still come up with more bullshit loans.

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Trajan

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Sun Feb-10-08 10:36 PM
Response to Reply #1

4. I am of the mind that ....

It isnt completely the fault of the industry (though there are instances where they are at fault), but it is due to the defect of the conservative movement itself, which demands VERY low wages paid for more productive work, with little or no benefits, including pensions and health care insurance ...

IF a person were to get a decent 5% raise every year, they would be FAR more likely to pay the increased payment at the end of the initial term.

The philosophy of the GOP makes it impossible to pay jacked up house payments, or much of anything else, for that matter ....

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MadMaddie

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Sun Feb-10-08 10:39 PM
Response to Reply #4

5. I agree..the Conservative movement is a Pox on America.

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Gman

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Sun Feb-10-08 10:42 PM
Response to Reply #4

6. Remember "The Ownership Society"

this is what that was all about. It was wide open, make as much money as you can as fast as you can. Everything this administration did was to leave no industry without the means to scam as many people as they possibly could and get away with it.

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Warpy

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Sun Feb-10-08 10:32 PM
Response to Original message

2. It's not going to work

because people in areas where they'd need ARMs to buy the most modest house in the area are just not biting. They know the crash is coming and they want to wait until after it happens if they are thinking of buying, at all.

I don't think their saturation ads begging for more investor money is going to work, either. They were almost as bad as Citi when it came to being suckers for CDOs and other risky "assets."

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Ichingcarpenter

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Sun Feb-10-08 10:35 PM
Response to Original message

3. Not good

I anticipate a total reassessment of the world economic structure
by 2012 which will bring about a total change how we look at money.

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Karenina

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Sun Feb-10-08 11:31 PM
Response to Reply #3

7. Bingo.

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